Supreme Court Justice Elena Kagan shot down a last-minute emergency application filed by consumers on Monday that sought to halt the Paramount-Warner Bros. merger from closing the following day.
Kagan, who handles emergency applications arising from the U.S. Court of Appeals for the 9th Circuit, denied the plaintiffs’ petition without providing a reason. Their case was previously rejected by the district court and appeals court.
Earlier Monday, five consumers who described themselves as Paramount subscribers, viewers, and cable customers argued the merger remains anticompetitive after 12 Democratic state attorneys general reached a settlement with the two Hollywood studios.
“The States’ settlement itself requires that the combined company not sell or close the Paramount or Warner Bros. lots during the commitment period, provides reapplication rights to employees displaced by the transaction, and creates an editorial-independence board,” the court filing says. “Those safeguards show the magnitude of the integration that closing will unleash, but they do not preserve competition between Paramount and Warner Bros.”
On Tuesday, Paramount and Warner Bros. are set to finally merge under Skydance after a monthslong bidding war and subsequent legal battle that never made it to trial. The plaintiffs claimed the anticipated closing date would result in “immediate and irreparable injury” to consumers who pay for the HBO Max and Paramount+ streaming services.
“Closing will not merely change a stock ledger,” they said. “It will replace separate ownership with common control over competing studios, streaming products and news organizations and permit the integration respondents themselves describe. Once independent pricing, programming, release, newsroom, technology, employment and investment decisions are centralized, later relief cannot restore the period of competition that was lost.”
If Kagan let the appeal proceed, the Supreme Court would have had to block the $111 billion transaction while considering the petition.
“The requested order is narrow: preserve separate ownership and prohibit integration pending disposition of the petition or further order,” the emergency application says. “It does not decide final antitrust liability. It preserves the Court’s ability to decide the legal questions before the October 6 closing changes the competitive structure the Clayton Act is designed to protect.”
JUDGE APPROVES SETTLEMENT OF PARAMOUNT-WARNER BROS. MERGER
Now that the eleventh-hour challenge was denied, Paramount CEO David Ellison can move forward with closing the merger as planned. The deal cleared its last major legal hurdle last week when U.S. District Judge Araceli Martinez-Olguin approved the states’ settlement with Paramount and Warner Bros.
Days later, Ellison announced Skydance will oversee the two companies and their respective media assets. Beyond the theatrical and streaming markets, the merger brings CBS News and CNN under the direction of a board that will ensure the editorial independence of each news outlet. Paramount controls CBS News, and Warner Bros. owns CNN.