UPDATED with Paramount statement: The Writers Guild of America is seeking a preliminary injunction to at least temporarily halt Paramount’s proposed merger with Warner Bros Discovery, hoping to align the timing of its case with that of a dozen state attorneys general.
In a motion filed early Wednesday in federal court in Oakland, the WGA‘s legal team argued that the transaction “is presumptively illegal in the market for writing services for anticipated top grossing films,” noting that the combined companies would have a 35% share of that market.
The WGA, which filed a suit to block the merger last month, added that it would “eliminate head-to-head competition between two close competitors, whose competition is vital for WGA writers.”
The WGA also argued that it met other thresholds for obtaining a preliminary injunction, including that a merger would generate irreparable harm in that it would be “virtually impossible to unwind and would render any eventual divestiture remedy ineffective.” The WGA legal team also wrote that the “balance of equities” favors an injunction “because of the public interest in preserving competition, and the imminent threat of writers suffering competitive harm from lost employment opportunities, suppressed compensation, and narrowed creative possibilities that would result from the Transaction. Moreover, any harm Defendants may suffer from delayed closing is ‘self-inflicted’ as a result of their own bargained-for agreement.”
Paramount’s deal with Warner Bros Discovery includes a $7 million-per-day ticking fee for each day that the merger is not closed beyond September 30.
U.S. District Judge Araceli Martínez-Olguín on Monday granted state AGs a temporary restraining order that paused the transaction for 14 days. She set a hearing of August 3 for a hearing on the states’ motion for preliminary injunction, which would prevent the merger from closing in a longer term, perhaps until an appeal or trial.
The WGA’s lawsuit is separate from the state AGs’ case, and its focus is on the labor market. But the guild is seeking to align the timing of its motion to Martínez-Olguín’s schedule for the state AG case, with its hearing also on August 3. In a separate motion, the WGA legal team wrote that they “seek full alignment only if it can be done without altering the States Litigation schedule. If this is not feasible, Plaintiffs respectfully request a separate but similarly expedited schedule.” They added that Paramount’s attorneys “could not secure their clients’ consent” to agree to the schedule. The WGA lawyers also wrote that absent an expedited schedule, they “would be forced” to seek their own temporary restraining order.
Martínez-Olguín set a deadline for Thursday for the state AGs to file their motion for a preliminary injunction, with Paramount’s opposition due on Monday, and the state reply to that due July 30.
After the motion was filed today, a Paramount spokesperson said, “We are confident the evidence will demonstrate that this merger is pro-competitive and will expand opportunities for writers and creative talent alike. WGA’s complaint does not reflect modern market realities and ignores the strong incentives the combined company will have to invest in original programing and creative talent. A combined Paramount-WBD will mean more jobs, more writers’ rooms, more staffed positions, and more sustained work across film and television — not less. We will continue to vigorously defend the transaction.”
