The Paramount-Warner Bros. Discovery merger appeared to have cleared one of its final major obstacles when California Attorney General Rob Bonta and 11 other state attorneys general agreed to settle their antitrust lawsuit against the massive media combination.
Now, opponents of the merger are making a last-ditch effort to keep the deal from crossing the finish line — and the federal judge overseeing the case is giving them an opportunity to make their argument.
According to Variety, the Block the Merger coalition has filed an amicus brief urging U.S. District Judge Araceli Martínez-Olguín to reject the proposed consent decree between Paramount and the states, arguing that the settlement fails to adequately address the very competition concerns that led Bonta and the other attorneys general to sue in the first place.
The filing comes after Martínez-Olguín declined to immediately approve the settlement Thursday and permitted outside groups to submit briefs challenging it.
That means the Paramount-Warner Bros. merger is not dead — far from it — but what looked like a relatively straightforward final judicial approval has suddenly become another potential roadblock.
Merger Opponents Tell Judge to Reject Settlement
The Block the Merger coalition’s argument centers largely on an apparent contradiction between what California previously said was necessary to address the merger and what the states ultimately accepted.
As the coalition’s brief states: “The Attorney General for the lead Plaintiff State, California, publicly criticized the very behavioral remedies that the parties now ask the Court to approve.”
The groups then argue that regardless of why the states changed their position, the underlying competition concerns remain.
“But whatever the reasons for the States’ about-face, neither time nor circumstance changes the fact that this merger lessens competition.”
That argument directly targets Bonta’s previous position.
California Attorney General Rob Bonta – YouTube, KCRA 3
Before reaching the settlement, California’s attorney general had repeatedly pushed for what he called “robust structural remedies” — essentially divestitures — rather than merely accepting promises governing how the combined company would behave after the merger.
The final settlement, however, did not require Paramount to break apart the combined company or sell major assets before closing.
Bonta acknowledged after announcing the agreement that blocking the merger entirely had been his preferred outcome.
“I don’t think these two companies should merge,” Bonta said. “But that’s not something that we are focused on with our resolution here.”
He nevertheless defended the agreement as “very strong,” pointing toward theatrical-release guarantees, production commitments, independent monitoring, and other concessions secured from Paramount.
Coalition Calls Settlement ‘Procedurally Unfair’
The coalition is also challenging the way the agreement was negotiated.
According to the brief: “The structure of the proposed consent decree puts Plaintiff States in the position of simultaneously representing two sets of stakeholders whose fundamental interests trade off.”
It concludes: “That is precisely the kind of conflict that makes representation inadequate and a settlement procedurally unfair.”
The groups followed that filing with an even harsher joint statement Friday.
“Since the terms of the consent decree were announced on Monday morning, few outside of those with a financial interest in this deal have suggested that it addresses the harms to competition, creativity, and independent journalism this merger will cause for years to come,” the organizations said.
David Ellison talks to Bloomberg – YouTube, Bloomberg Podcasts
They added that the agreement had been greeted with “silence, skepticism, or tepid support at best.”
The coalition then specifically invoked Bonta’s own previous arguments against the merger.
“The arguments laid out in this brief reflect the concerns that just days ago, California Attorney General Bonta also willingly voiced,” the groups said. “While we may never know what caused the radical turnabout to deliver such a toothless settlement, we do know that this consent decree bucks governmental safeguards designed to protect the public from harm.”
Their requested remedy couldn’t be clearer: “The court should reject it outright.”
The organizations involved in the filing include Free Press, the Committee for the First Amendment, the Freedom of the Press Foundation, the Future Film Coalition, and the International Documentary Association. Other organizations and individuals have submitted their own objections, including the League of United Latin American Citizens.
These are arguments being made by merger opponents, not findings by the court. Martínez-Olguín has not ruled that the settlement is inadequate or that the merger violates antitrust law.
A Biden-Appointed Judge Now Holds the Keys
The federal judge considering these objections is Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California.
Martínez-Olguín was nominated to the federal bench by President Joe Biden on January 3, 2023, after an earlier Biden nomination in 2022 expired without a Senate vote.
Her eventual confirmation was extraordinarily narrow.
Joe Biden talking to Jimmy Kimmel – YouTube, Jimmy Kimmel Live!
The Senate deadlocked 48-48 on Martínez-Olguín’s nomination on February 28, 2023. Then-Vice President Kamala Harris cast the tie-breaking vote in favor of confirmation. Martínez-Olguín received her judicial commission several days later on March 3.
Before joining the federal bench, Martínez-Olguín worked for several civil-rights and immigration organizations, including the American Civil Liberties Union’s Women’s Rights Project and Immigrants’ Rights Project, as well as the National Immigration Law Center. She also previously worked as a civil-rights attorney for the U.S. Department of Education.
Judge Refuses to Simply Rubber-Stamp Deal
Perhaps more significant than Martínez-Olguín’s background is what she has actually done in the case.
The judge didn’t immediately approve the consent decree during Thursday’s hearing.
Instead, she raised additional questions about the agreement and ordered Paramount and the states to respond to concerns raised by Democratic Sen. Cory Booker, who has asked the court to conduct an independent public-interest review of the settlement.
Logos for Paramount Skydance and Warner Bros. – Paramount, WB
Martínez-Olguín also asked the parties to provide information about the committee responsible for monitoring Paramount’s compliance and requested that they address whether the agreement resulted from a legitimate arm’s-length negotiation rather than collusion.
According to TheWrap, the judge asked the parties to: “shore up the idea that [the settlement] is not the result of collusion, but instead was more of an arms length process.”
California Senior Assistant Attorney General Paula Blizzard responded that the negotiations were “procedurally fair” and conducted at “arms length,” pointing to extensive negotiations involving conferences, phone calls, and multiple drafts.
Martínez-Olguín has said she will issue her ruling “in due course.”
Delay Could Cost Paramount Millions Every Day
The clock is now becoming a major factor.
Paramount CEO David Ellison previously told employees that he expected the Warner Bros. Discovery transaction to close roughly two weeks after the settlement, assuming the consent decree received timely approval.
But Paramount’s merger agreement contains an expensive ticking fee.
Beginning October 1, Paramount is expected to accrue approximately $7 million per day payable to Warner Bros. Discovery if the transaction remains unclosed.
The logo for Paramount Skydance – Paramount
Block the Merger initially proposed a briefing schedule extending through October 13.
Paramount strongly objected, arguing that the delay could force the company to “incur tens (if not hundreds) of millions of dollars of payments while adding nothing to the record.”
That gives Paramount an enormous financial incentive to get the case resolved as quickly as possible.
Paramount Already Made Major Concessions
The proposed settlement itself contains numerous commitments from the combined company.
Paramount has agreed to release at least 30 theatrical films annually during the first two years following the merger and at least 32 annually during years three through five.
The company must also invest an additional $300 million annually in U.S. film and television production for five years, amounting to $1.5 billion.
Other provisions include a 45-day theatrical window for qualifying wide releases, requirements governing independent and tentpole films, continued operation of the Paramount and Warner Bros. studio lots for at least five years, separate negotiations for the companies’ respective cable-network distribution agreements, and independent oversight governing CNN and CBS News.
A screenshot from CNN – YouTube, CNN
Certain violations can trigger substantial penalties, including potential forced divestitures of assets such as Paramount’s stake in Miramax and several cable networks.
Bonta has argued that the settlement protects against the contraction Hollywood experienced following Disney’s acquisition of 21st Century Fox.
“This agreement is the opposite of Disney-Fox,” Bonta said this week.
He argued that rather than merely preventing production cuts, the Paramount agreement “locks in a massive upside.”
The Merger Isn’t Dead — But the Finish Line Just Moved
None of this means Martínez-Olguín has blocked the Paramount-Warner Bros. Discovery merger.
She hasn’t, nor has she ruled in favor of Block the Merger’s arguments.
What has changed is that judicial approval of the settlement can no longer be treated as an automatic formality.
The states have settled. Paramount has agreed to substantial concessions. The Writers Guild of America has also resolved its separate lawsuit, despite saying the terms secured by the states “fall far short of adequately protecting writers.”
David Ellison in an interview with Bloomberg – YouTube, Bloomberg Podcasts
But Martínez-Olguín still has to approve the consent decree, and she is now considering objections from groups asking her to reject it altogether.
If she approves the settlement, Paramount would seemingly have a clear path toward completing its Warner Bros. Discovery acquisition.
If she demands changes, the merger could be delayed while the parties renegotiate portions of the agreement.
And if she rejects the consent decree entirely, the antitrust lawsuit would remain unresolved, potentially reopening a legal fight that Paramount and the states believed they had finally put behind them.
For David Ellison and Paramount, that makes every additional day increasingly expensive.
The political battle over the merger may largely be finished. The courtroom battle apparently isn’t.
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