A US federal court has temporarily stopped Paramount Skydance from completing its proposed $110 billion acquisition of Warner Bros. Discovery. The court’s order will remain in place until at least August 3, 2026, while it reviews legal objections to the deal.

According to a Reuters report yesterday , a group of 12 US states, led by California, has filed a lawsuit claiming that the merger could reduce competition in the entertainment and media industry. The states argue that if Paramount and Warner Bros. Discovery become one company, it could lead to higher prices, fewer choices for viewers, and job losses.

The judge has not cancelled the merger. Instead, the court has only put the deal on hold for now. A hearing is scheduled on August 3, after which the court will decide whether the merger can move forward or should remain paused while the case continues.

Paramount Skydance has defended the acquisition, saying the merger will help the company compete with major streaming and technology companies such as Netflix, Amazon and Apple. The company believes the deal will make it stronger in the fast-growing streaming market.

The delay could also be costly. Under the merger agreement, if the deal is not completed by September 30, 2026, Paramount may have to pay Warner Bros. Discovery shareholders around $7 million per day until the transaction is completed.