Paramount/WBD merger delayed for months as states' lawsuit moves toward trial

Paramount Skydance agreed to a longer-term delay of its $111 billion acquisition of Warner Bros. Discovery, preventing the companies from combining until after a judge rules on the merits of a case in which a dozen states challenged the legality of the merger.

Under a stipulation filed in court today, the states and companies agreed that 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 on June 1, 2027, whichever is earlier. The delay was also agreed to by the Writers Guild of America, which filed its own lawsuit to block the merger. If there is no merits determination by June 1, the plaintiffs could seek a preliminary injunction to keep blocking the deal.

The agreement amounts to “a months-long halt” to the merger, New York Attorney General Letitia James’ office said. “Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” James said.

Paramount also claimed victory, telling media outlets that “the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence. This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached.”

Led by California, 12 states sued Paramount and WBD and won a temporary restraining order against the merger on Monday. Judge Araceli Martínez-Olguín at US District Court for the Northern District of California found that the deal is likely to reduce competition substantially and violate antitrust laws.

The states sued after the merger was greenlit by the Trump administration. The US approval reportedly surprised US Department of Justice staff lawyers who led the agency’s investigation into the deal and were leaning toward recommending a lawsuit to block it.

States say the merger will eliminate competition by combining two of the five major Hollywood movie studios and two of the five major owners of basic cable TV channels. “We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day,” California Attorney General Rob Bonta said today.