Paramount+ Subscribers Fail to Block Warner Bros. Merger

A group of Paramount+ subscribers was unsuccessful in their attempt to secure a court order to halt the merger with Warner Bros. Discovery on Thursday. However, a coalition of states plans to make another attempt on Friday.

The subscribers filed a lawsuit in April, claiming they experienced price increases and potential loss of viewing options due to the merger. During a hearing on Thursday, Judge Araceli Martinez-Olguin rejected their request for a preliminary injunction.

“This is an extraordinary form of preliminary relief, and the plaintiffs did not provide any evidence to support their motion,” the judge remarked. “Additionally, I have significant concerns about the plaintiffs’ standing to pursue these antitrust claims.”

On Friday, Paramount will face a more challenging situation as a coalition of 12 state attorneys general seeks a temporary restraining order to halt the merger. The states filed their lawsuit on Monday, contending that the $111 billion merger would harm competition in the theatrical and basic cable markets.

Earlier on Thursday, Paramount submitted its opposition, asserting that the states are unlikely to succeed in their case and should not receive a restraining order.

Jeffrey Kessler, Paramount’s lead attorney, appeared in the courtroom in Oakland, California, on Thursday afternoon to oppose the subscribers’ lawsuit. He argued that the subscribers’ lawyer, Joseph Alioto, had recently filed five similar lawsuits aimed at blocking major mergers—four involving some of the same individual plaintiffs—and had lost all of them.

“It is well-established in this circuit and others that to obtain a preliminary injunction, you must provide clear evidence,” Kessler stated. “Without evidence, a preliminary injunction cannot be granted.”

Paramount has submitted a motion to dismiss the lawsuit, which Martinez-Olguin is considering. She inquired how Alioto would amend the lawsuit if given the chance. Alioto responded that he would seek to access the discovery materials provided to California and the other states’ attorneys general.

“We are a private group,” he stated. “We do not have the resources of a government.”

Alioto previously represented private parties attempting to block the Microsoft-Activision merger, the Capitol One-Discover merger, the Nippon Steel-U.S. Steel merger, the Kroger-Albertsons merger, the United Airlines-Continental merger, and the T-Mobile-Sprint merger.

Responding to Kessler’s comments on the previous lawsuits, Alioto said, “It’s true that these plaintiffs have filed other cases, and we are proud of their actions.”

“They were referred to me by Senator Harry Reid because the Department of Justice did not challenge these mergers,” he explained.

The state attorneys general and Paramount have previously agreed to consolidate the private party suit with the states’ case, meaning Martinez-Olguin will oversee the state case as well.

The Writers Guild of America also filed a federal antitrust lawsuit against the merger on Tuesday, while the Freedom of the Press Foundation and the Public Integrity Project submitted a shareholder derivative lawsuit seeking to block the merger in Delaware Chancery Court.