By Angela Palumbo

Paramount Skydance stock was down Monday after a federal judge temporarily paused the media company from acquiring Warner Bros. Discovery.

U.S. District Judge Araceli Martínez-Olguín of the Northern District of California granted a temporary restraining order that prohibits Paramount and Warner Bros. from merging. Last week, California Attorney General Rob Bonta, as part of a coalition of 12 attorneys general, filed a lawsuit that challenges the $110 billion acquisition, arguing that the deal violates antitrust law.

The judge appears to agree, according to Monday's order.

"Plaintiffs present compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market (anticipating 27% market share for wide-release theatrical distribution market)," Monday's court filing says. "On this combined firm market share alone, the Court is persuaded that it can presume the proposed merger is likely to violate antitrust laws."

In a statement Monday, Bonta said that the judge's decision was "a critical first win in our case to ensure this megamerger never sees the light of day."

Warner Bros. declined to respond to a request for comment.

A Paramount spokesperson said Monday that the company is "confident the evidence will demonstrate that the State AGs' antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities."

Last week, Paramount also fired back on the lawsuit's claims that the proposed merger would hurt competition in the media space.

"The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent," Paramount said at the time.

Shares of Paramount Skydance fell 0.4% to $8.72 on Monday afternoon, reversing some of the deeper losses from earlier in the session. Warner Bros. Discovery stock dropped 2.8% to $26.13.

The Paramount, Warner Bros. merger received regulatory approval from the Justice Department on June 12. At the time, the DOJ said the transaction is not likely to result in harm to competition or American consumers. Critics are yet to be convinced.

The Writers Guild of America filed their own complaint against Paramount and Warner Bros. last week, alleging that the merger would eliminate competition for buying film and television writing, resulting in suppressed compensation, worse deal terms, and reduced programming volume and diversity.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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July 20, 2026 14:59 ET (18:59 GMT)