A California federal judge heard arguments on Friday over a bid by a coalition of 12 US states to temporarily halt Paramount's merger with Warner Bros. Discovery, warning that unwinding the deal later would be difficult if it proceeds and is subsequently found unlawful. Judge Araceli Martinez-Olguin, who is due to rule by next Wednesday, appeared open to granting a restraining order, noting that Paramount seemed to concede it would not be harmed by a temporary pause of up to 28 days. The case centres on whether the merger would harm competition in the theatrical film and basic cable markets, with significant financial and industry consequences riding on the outcome.

Led by California, the states argue the tie-up would let the combined company raise prices and reduce output, harming cinemas, cable and satellite distributors, and consumers. Paramount's attorney Jeffrey Kessler countered that talent mobility and new entrants such as Apple and Amazon MGM Studios show the industry remains competitive, while the states' lawyer James Weingarten pointed out that "F1" was in fact distributed by Warner Bros. itself, and noted that 67 million Americans (half of TV households) still have cable and that the five major studios have held steady market share for over a decade. Paramount is pushing for a preliminary injunction ruling by early September, offering not to close the deal for 30 days if a hearing is set for late August; from 30 September it faces penalties of $7 million a day to investors if the deal remains unclosed, having already pledged not to close before 22 July.