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Judge Issues 14-Day Restraining Order on Paramount, Warner Bros. Merger

The District Court for the Northern District of California issued a 14-day temporary restraining order on Paramount's hostile takeover bid for Warner Bros. Discovery on Monday, prior to Paramount's earliest set date of Tuesday, July 22 for closing the transaction.

The restraining order favors a 12-state coalition that seeks to block the merger from going through. The coalition, led by California Attorney General Rob Bonta, also includes state attorney generals from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The coalition argues that the merger would violate federal antitrust law, harming competition by combining two of the top three cable programmers and two of the top five film distributors.

Judge Araceli Martínez-Olguín of the District Court for the Northern District of California heard arguments from both the coalition and Paramount and Warner Bros. last Friday, writing that the 12-state coalition "demonstrates that serious questions going to the merits remain." The states are also seeking a preliminary injunction on the deal, which would block the deal until the judge gives out her ruling on the injunction. Judge Martínez-Olguín set an August 3 date for a hearing on the preliminary injunction, though that may also get delayed if the parties agree.

If the deal does not close by September 30, Paramount will owe millions of U.S. dollars a day to Warner Bros. investors.

Paramount, also known as Paramount Pictures, owns the streaming services Paramount+ and Pluto TV, and television channels including CBS, Nickelodeon, Comedy Central, MTV, and Showtime. Paramount+ raised its prices in January 2026 to US$8.99 with ads and US$13.99 without ads. The service previously raised prices in August 2024. The company releases the live-action Sonic the Hedgehog films.

Warner Bros. Discovery Announced Plans for Possible Sale in October

Warner Bros. Discovery had revealed on October 21 last year that it was evaluating the possible acquisition of the whole company, or separate acquisitions for its Warner Bros. and Discovery Global businesses, as part of "a review of strategic alternatives to maximize shareholder value" initiated by the company's Board of Directors. The announcement noted that Warner Bros. Discovery had received "unsolicited interest" from multiple parties regarding a possible acquisition of the entire company or the Warner Bros. business. Warner Bros. Discovery had also left open the possibility of "an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to our shareholders." The company had stated that it does not assure that the review would result in a final sale of the company.

The Wall Street Journal reported in September 2025 that the newly formed entertainment conglomerate Paramount Skydance was evaluating the possibility of acquiring Warner Bros. Discovery. Bloomberg reported that October that Warner Bros. Discovery had rejected an offer from Paramount Skydance for US$20 per share, with a report from the New York Post that October claiming that Warner Bros. Discovery president and CEO David Zaslav wanting a sale price of US$30 per share. Deadline reported Paramount had insisted in a letter to Warner Bros. Discovery that the rival offers from Netflix and Comcast both “present serious issues that no regulator will be able to ignore” and that Netflix would face major antitrust hurdles adding HBO Max to the company.

Warner Bros. Discovery had announced its intent to split its company into two separate publicly traded companies in June 2025, later naming these companies as Warner Bros. and Discovery Global. Warner Bros. will own Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, and Warner Bros. Gaming Studios. Discovery Global will own CNN, TNT Sports in the U.S., and Discovery. The split was planned to occur in mid-2026.

Netflix Entered Earlier Agreement to Acquire Warner Bros., Paramount Makes Hostile Takeover Bid

Netflix and Warner Bros. Discovery entered into a definitive agreement for the former to acquire Warner Bros. on December 5. The deal would have closed after Warner Bros. Discovery's previously announced split into two separate publicly traded companies, Warner Bros. and Discovery Global, which was expected to be completed during Q3 2026. The transaction's completion was also subject to regulatory approvals, shareholder approval, and other closing conditions.

Netflix offered US$27.75 per Warner Bros. Discovery share with a total equity value (for shareholders) of approximately US$72.0 billion and a total enterprise value of approximately US$82.7 billion. Warner Bros. Discovery shareholders would have received US$23.25 in cash and US$4.50 in shares of Netflix common stock for each share of Warner Bros. Discovery stock.

The Boards of Directors of both Netflix and Warner Bros. Discovery unanimously approved the transaction.

Reuters had reported on December 5 that Netflix entered into exclusive talks with entertainment conglomerate Warner Bros. Discovery regarding the possibility of acquiring its studio and streaming service. Reuters had reported on December 4 that Netflix offered around US$28 a share for the company. Netflix, Paramount Skydance, and Comcast made preliminary buyout proposals, and then Warner Bros. Discovery received a second round of bids this week.  Bloomberg additionally reported that Netflix also offered a US$5 billion breakup fee if regulators do not approve of the deal. Deadline also reported on December 4 that the Directors Guild of America planned to meet with Netflix to discuss its "concerns" regarding the potential acquisition.

Paramount made an initial hostile takeover bid for Warner Bros. Discovery on December 8, three days after Netflix and Warner Bros. Discovery their definitive agreement. Paramount was offering US$30 per Warner Bros. Discovery share as opposed to Netflix's offer of US$27.75 per share. Unlike Netflix, which sought to acquire Warner Bros. after Warner Bros. Discovery splits into Warner Bros. and Discovery Global, Paramount aims to acquire Warner Bros. Discovery as a whole. As a hostile takeover bid, Paramount's offer was unsolicited, but the company was hoping to appeal to the Warner Bros. Discovery shareholders.

Netflix Bows Out After Paramount Offers Higher Bid

Warner Bros. Discovery announced on February 26 that Paramount's offer was now better than Netflix's previous offer, constituting what it calls a "Company Superior Proposal." This triggered a period of four business days for Netflix to raise its offer, but Netflix declined to do so that same day. This paved the way for a Paramount acquisition of the entire Warner Bros. Discovery company, should Paramount decide to execute the acquisition and Warner Bros. Discovery accept.

If Paramount executes the acquisition, it will pay $31 in cash per share of Warner Bros. Discovery (up from its previous offer of US$30 per share, with Netflix's deal offering US$27.75 per share), with a ticketing fee of $0.25 per share per quarter (if the deal is delayed past September 30, 2026) or a $7 billion fee (if regulators terminate the deal). Warner Bros. Discovery would also need to pay Netflix a $2.8 billion termination fee to terminate their previous merger agreement, a sum that Paramount is willing to pay. As part of the deal, Paramount also proposed an obligation of Oracle co-founder and CTO Larry Ellison (Paramount CEO David Ellison's father) and an associated trust to contribute equity funding toward Warner Bros. Discovery's debt, and a “Company Material Adverse Effect” definition that excludes the performance of Warner Bros. Discovery's Global Linear Networks segment. The Ellison Trust and Larry Ellison are committing $45.7 billion to support the solvency certificate of required by Paramount's lending banks, while Bank of America Merrill Lynch, Citi, and Apollo are providing a $57.5 billion debt commitment.

How Warner Bros. Discovery Was Formed

Warner Bros. Discovery was formed after AT&T spun off its WarnerMedia business and it merged with Discovery, a process that began in 2021 and completed the following year. Some of the anime industry-related assets involved in the company's formation included Cartoon Network (with the Toonami and Adult Swim programming blocks), Boomerang, HBO Max, VRV, and other channels and services that have offered anime in their programming. On the Discovery side, the Discovery Family channel (formerly known as The Hub) featured programming with some Japanese roots such as Transformers, Pac-Man, and Deltora Quest.

Warner Bros. Discovery also owns the production company Warner Bros. Japan, which launched in 2011. 

Warner Bros. Japan is involved in several anime properties and has produced over 80 anime titles, including Is It Wrong to Try to Pick Up Girls in a Dungeon?, Food Wars! Shokugeki no Soma, JoJo's Bizarre Adventure, Record of Ragnarok, and SPY x FAMILY. Warner Bros. Japan and its parent company also handle overseas and domestic live-action film productions of Japanese properties such as Godzilla, Rurouni Kenshin, Gintama, and Death Note. As of 204, Warner Bros. Japan plans to increase its annual output from five to 10 anime titles to over 10. Warner Bros. Japan had announced in September it would stop distributing films in Japan at the end of 2025. Toho-Towa will distribute Warner Bros. films going forward.

The HBO Max streaming service offers GKIDS' "entire Studio Ghibli film library." At launch, Crunchyroll (previously part of WarnerMedia), Cartoon Network, Adult Swim, and Rooster Teeth also offered content through the service. The service announced an increase in the price of its subscription plans in October 2025, marking the third price increase since launch. (HBO Max raised its subscription prices in February 2023 and June 2024.)

Source: Variety (Gene Maddaus)