US judges put a halt to the Paramount-Warner Bros | merger Media News

At risk is a $650m quarterly fine if the merger is delayed beyond September, according to the merger agreement.

An alliance of 12 countries led by California won in recent requests to block Paramount Skydance’s purchase of Warner Bros. Discovery, the parent of studios including New Line Cinema and media network CNN, amid accusations that the merger would harm competition.

On Monday, the United States District Judge, Araceli Martinez-Olguin, in response to the lawsuit seeking to cancel the agreement that the countries submitted last Monday, gave the countries 14 days to argue the merits of the case.

It may take months for the court to issue its final decision. Judge Martinez-Olguin will hear the petition on August 3.

The states argued in their lawsuit, which was filed in federal court in California, that the merger would reduce the number of products available to consumers and lead to mass layoffs.

Under the terms of the merger, if the deal is delayed, Paramount will have to pay $650m per quarter, starting on September 30, under what is known as a penalty. The media executive is also due 25 cents-per-share, about $7m a day, according to the merger agreement with the company.

The deal has long been contested in the Hollywood and Washington circles amid accusations that the merger would reduce jobs in film and television, reduce consumer choice and affect the quality of news by bringing CBS News and CNN under one roof.

There is concern inside that Paramount’s Larry Ellison, a close friend of the US President, Donald Trump, and his son David, the CEO, can bring change to CNN as they do. It’s done at CBS. That includes hiring Bari Weiss, a right-wing think tank with no previous experience in television, to lead one of the US’s top radio stations.

Reports that Weiss could shape CNN’s future if the merger goes through have some top talent considering leaving. Paula Reid is heading to MS Now, and Anderson Cooper has reportedly floated a move to leave the network after the Weiss takeover.

Media rights experts have warned that the merger will undermine access to diverse media.

“The merger of Paramount-Warner Bros. would set a dangerous precedent in regulatory law by favoring media owners based on their willingness to publish news that pleases the President of the United States,” Rodney Benson, a professor in the Department of Media, Culture, and Communication at New York University, said in a recently released analysis of the merger’s press freedom.

“The merger will also increase the interest of the owners of major media outlets and social networks, reducing consumer choice and increasing the amount of political news and information that is closely related to the government in power.”

This was not the only case filed last week. On Tuesday, the Writers Guild of America filed another suit to block the merger.

The court said the merger would “eliminate competition in the already consolidated industry, threaten the livelihoods of entertainment workers and the diversity of television and film,” WGA West President Michele Mulroney said.

Representatives for Paramount Skydance did not respond to Al Jazeera’s request for comment.

On Wall Street, shares of Paramount Skydance fell during the break but quickly rebounded to trade around midday. Warner Bros. Discovery stock continued to slide following the decision, down 3.8 percent in afternoon trading.