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 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 a merger 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 Sept. 30.
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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 Aug. 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 Aug. 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 on July 30.
A Paramount spokesperson did not immediately respond to a request for comment. But when the WGA lawsuit was filed, the company said, “A stronger Hollywood only means something if it’s stronger for the writers who power it. A combined Paramount-WBD will have the scale and resources to reverse the current trends in our industry and expand opportunities for writers, not shrink them: more development slates, more series and film greenlights, and our continued strong commitment to working with the guild’s writers across our brands.”
