A federal judge has ordered Paramount and Warner Bros.Discovery to halt their $81 billion merger for at least two weeks, granting states challenging the deal additional time to pursue their legal case.

Twelve states, led by California, filed a lawsuit arguing the merger would eliminate competition in Hollywood and reduce consumer choices for moviegoers and cable customers.The states' attorneys general demanded the deal be paused until a court could fully evaluate their claims.When the companies refused, the states sought a temporary restraining order, which Judge Araceli Martínez-Olguín granted.This decision opens the door to a potential preliminary injunction to block the merger.

California Attorney General Rob Bonta called the ruling a 'critical first win' in preventing the merger, warning of reduced opportunities and poorer services if unchecked.The merger would combine two of Hollywood's last five legacy studios, along with TV networks, streaming libraries, and news operations.

Paramount, which was acquired by Skydance last year, has vowed to 'vigorously defend' the deal, arguing it would strengthen competition against larger rivals.The temporary block extends the deal's timeline, with a hearing scheduled for August 3, though the schedule may shift.

The states criticized Paramount's proposed timeline, which includes a $7 million daily fee for shareholders if the deal isn't closed by September 30, as unfair and unprecedented.