A federal judge has scheduled the antitrust trial over Paramount’s proposed $110 billion merger with Warner Bros. Discovery for next March.
U.S. District Judge Araceli MartÃnez-OlguÃn wrote that the trial will take place from March 2 to March 19 of next year in federal court in Oakland.
The trial dates are significant because after Sept. 30, Paramount will have to pay about $7 million for every day the transaction doesn’t close, under an agreement with WBD.
Paramount previously announced that the planned takeover would remain on hold while it defends against antitrust lawsuits filed last month by a coalition of 12 state attorneys general led by California. As a result, the companies, the state attorneys general and the Writers Guild of America agreed to cancel a preliminary injunction hearing that had been scheduled for Aug. 3.
California Attorney General Rob Bonta said last week that if the court finds in favor of the states, the merger would be blocked pending appeal.
“Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse,” Bonta said in a statement. “We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day.”
Paramount reported mixed quarterly numbers Tuesday with strong streaming and a continuing drop in traditional broadcast TV viewing. The company also said it “fully expects” the merger to close.
“As it relates to the planned acquisition of Warner Bros. Discovery, we fully expect the transaction to close and remain focused on preparing for a successful combination once it is complete,” Paramount CEO David Ellison wrote in a letter to shareholders.
After the states filed suit July 13, the Writers Guild of America sued to block the deal on the grounds it would cause harm to writers and shrink the labor market.
The guild alleges Paramount’s pending acquisition of WBD would reduce opportunities, lower pay and worsen working conditions for writers. The union argues that the elimination of a key competitor and the creation of a dominant firm would reduce the quantity and variety of theatrical films and television series as the merged company would have a greater ability to reduce output.
Furthermore, WGA asserts that the merger would increase the ability of the few remaining companies to tacitly coordinate to further suppress competition for writers’ work.
Also last week, the Screen Actors Guild-American Federation of Television and Radio Artists announced its support for the lawsuits challenging the merger.
“Our members have every right to expect that the government will do thorough regulatory oversight when a deal of this magnitude takes place. The workers in this industry should not have to rely on promises and aspirational statements,” SAG-AFTRA President Sean Astin said. “These companies have the ability to commit to making more films and shows in this country and they should. This isn’t a conversation about shareholder value, it’s about the survival of the entertainment business in America.”
A Paramount representative previously said the planned merger “is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry.”
The company has said that the European Commission has formally cleared the acquisition, adding to approval from antitrust and competition authorities in the United States, Australia, Brazil, Canada, China, Kuwait, Montenegro, New Zealand, North Macedonia, Saudi Arabia, Serbia, South Africa, South Korea, Ukraine and the regional competition authority for the Common Market for Eastern and Southern Africa.