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Deal Paused Pending Trial
Paramount Skydance agreed to delay closing its Warner Bros. Discovery buyout as a judge considers a challenge from 12 states seeking to block the deal altogether.
In a court filing, Paramount said it wouldn't close the merger until either June 1, 2027, or whenever a court ruling is made on the merits of the states' lawsuit.
The pause follows U.S. District Judge Araceli Martinez-Olguin granting a temporary restraining order to freeze the transaction for several weeks after the states raised “serious questions” about the merger's potential to “substantially lessen competition.”
Variety reported the company entered a joint stipulation agreeing not to close the $111 billion transaction until five days after a trial is held or June 1, 2027, whichever is earlier, with no trial date set.
The agreement also cancels an Aug. 3 hearing in federal court in Oakland that had been scheduled to argue over the injunction motion.
Officials Call It Victory
New York Attorney General Letitia James said the halt was a “critical victory” and framed the deal as “Paramount’s illegal takeover of Warner Bros.” in a statement reported by The Hill.
California Attorney General Rob Bonta called the agreement “great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy,” according to Variety.
Paramount characterized the delay as a “significant win,” telling Variety that the result is “exactly what we have sought from the outset: a direct path to a trial based on the evidence.”
Variety also quoted Norm Eisen, co-founder of the Democracy Defenders Fund and a member of the #BlocktheMerger campaign, saying the Ellisons’ relationship with President Trump “helped them push through a disastrous deal” and that “This collective resistance is turning the tide.”
Ars Technica said the states and companies agreed the merger will not be completed and the firms will not integrate their operations until “five days after the merits determination in these matters,” or June 1, 2027, whichever is earlier.
Fees, Markets, and Next Steps
The delay carries financial consequences tied to a “ticking fee” that Paramount had been set to incur if the deal did not close by Sept. 30, with Variety saying it would begin to incur a $7-million-a-day fee to be paid to Warner Bros. investors.
Business Insider reported Paramount agreed to pause the mega-merger until five days after the antitrust cases are ruled on, or until June 1, 2027, whichever comes sooner, and said Paramount lawyer Jeffrey Kessler told the judge the company “would suffer very severe harm” if it had to pay the ticking fee.
Forbes reported the fee structure as “$0.25 per day” per share, amounting to “$650 million per quarter or $7 million per day,” and said the delayed merger could cost Paramount over $1 billion depending on timing.
The stakes extend beyond timing, as the states’ challenge alleges the deal would reduce competition in cable and theatrical markets, and Variety said the coalition alleges the deal will reduce competition in the cable and theatrical markets.
Ars Technica added that if there is no merits determination by June 1, the plaintiffs could seek a preliminary injunction to keep blocking the deal, keeping the companies from combining and integrating operations.
