Paramount+ Subscribers Fail to Block Warner Bros. Merger as States Will Try Again Friday

A handful of Paramount+ subscribers failed to win an order blocking the merger with Warner Bros. Discovery on Thursday, but a coalition of states will give it another try on Friday.

The plaintiffs sued in April, alleging that they had faced price hikes and risked losing viewing options as a result of the transaction. At a hearing on Thursday, Judge Araceli Martinez-Olguin denied their bid for a preliminary injunction.

“It’s extraordinary preliminary relief, and plaintiffs failed to submit a single item of evidence in support of the motion,” the judge said. “Moreover, I have some serious doubts about plaintiffs’ standing to pursue these antitrust claims.”

Paramount will face a harder test on Friday, as a coalition of 12 attorneys general are seeking a temporary restraining order to pause the merger. The states filed their suit on Monday, alleging that the $111 billion merger will harm competition in the theatrical and basic cable markets.

Earlier on Thursday, Paramount filed its opposition, arguing that the states are unlikely to prevail on their case and should not be granted a restraining order.

Jeffrey Kessler, Paramount’s lead lawyer, was in the courtroom in Oakland, Calif., on Thursday afternoon to oppose the subscribers’ lawsuit. He argued that the subscribers’ attorney, Joseph Alioto, has recently filed five similar actions seeking to block major mergers — four involving some of the same individual plaintiffs — and has lost every one.

“It’s very clear in this circuit and elsewhere that to get a preliminary injunction, you have to make a clear showing with evidence,” Kessler argued. “And when there is no evidence, then you cannot get a preliminary injunction.”

Paramount has filed a motion to dismiss the suit, which Martinez-Olguin took under submission. She asked Alioto how he would amend the suit if given the option. Alioto said he would seek to obtain the discovery that has been turned over to California and the other states attorneys general.

“We’re a private group,” he said. “We’re not a government. We don’t have the tools of a government.”

Alioto previously filed lawsuits on behalf of private parties who were trying 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 argument about the prior lawsuits, Alioto said, “That’s true — that these plaintiffs have filed other cases, and we’re proud that they did.”

“They were sent to me by Senator Harry Reid because the Department of Justice would not challenge these mergers,” he said.

The state attorneys general and Paramount previously agreed to link the private party suit to the states’ case, which means that Martinez-Olguin will handle the state matter as well.

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