<\/p>\n
July 20 (Reuters) – Paramount <\/span>Skydance PSKY.O must pause its $110 billion acquisition of Warner Bros. Discovery WBD.O through August 3, a federal judge ruled on Monday after a California-led coalition of states argued the merger would irreparably harm competition.<\/p>\n<\/div>\n U.S. District Judge Araceli Mart\u00ednez-Olgu\u00edn in Oakland handed an early win to the group of states including New York, Colorado and Massachusetts, saying they had made a \u201cstrong showing\u201d that the deal would unlawfully decrease competition.<\/p>\n<\/div>\n Warner Bros. Discovery shares were down as much as 4% on Monday afternoon.<\/p>\n<\/div>\n \u201cToday\u2019s decision is an important victory for all those who would be hurt by this merger, and I look forward to continuing to fight this case,\u201d said New York Attorney General Letitia James.<\/p>\n<\/div>\n The judge will hold a hearing on August 3 on whether the deal should be delayed throughout the course of the lawsuit, which could take months to reach a final ruling.<\/p>\n<\/div>\n \u201cWe are confident the evidence will demonstrate that the State AGs\u2019 antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,\u201d a Paramount <\/span>spokesperson said.<\/p>\n<\/div>\n The lawsuit, filed in Oakland federal court, threatens to derail Paramount <\/span>CEO David Ellison\u2019s bid to transform his company into a major rival of Netflix<\/a> NFLX.O and Disney DIS.N.<\/p>\n<\/div>\n California and 11 states sued on July 13<\/a>, arguing the deal would create a media behemoth with the power to raise prices in film and television.<\/p>\n<\/div>\n Mart\u00ednez-Olgu\u00edn agreed with the states that letting the deal close would likely lead to changes that are hard to undo if the merger is ultimately found to be illegal, such as job cuts and sharing of sensitive information.<\/p>\n<\/div>\n The judge said the deal looks likely to violate antitrust law if it gives the combined company 27% of the market for distribution of widely-released films as the states have alleged. A final determination would come after both sides present evidence at trial.<\/p>\n<\/div>\n Paramount <\/span>Skydance\u2019s argument that companies like Amazon<\/a> and Apple have entered the film market recently was not enough to show the merger is lawful, the judge said.<\/p>\n<\/div>\n With fewer distributors, studios could find it easier to pressure theater owners for a greater share of ticket revenue, the states have alleged.<\/p>\n<\/div>\nSTATES SUE<\/strong><\/h2>\n<\/p>\n