Jae C. Hong/Associated Press
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The anticipated merger between Paramount and Warner Bros. Discovery, valued at $111 billion, has been postponed indefinitely due to two ongoing legal challenges in court.
In a filing submitted to a federal court in California on Friday, Paramount stated it would not proceed with acquiring Warner until June 1, 2027, or until five days after the legal disputes are resolved, whichever occurs first.
The merger aims to combine Paramount and Warner’s film studios, streaming services like Paramount+ and HBO, along with numerous cable channels, CBS, and CNN.
Paramount is currently facing lawsuits from a coalition of 12 states and the Writers Guild of America, representing numerous Hollywood entertainment professionals.
The Democratic attorneys general and the Writers Guild claim that the merger would stifle competition, adversely affecting moviegoers, TV and news audiences, and those involved in producing entertainment and news content.
Recently, U.S. District Judge Araceli Martínez-Olguín issued a temporary restraining order to halt the acquisition, pending her signature on the agreement submitted on Friday.
In a statement, New York Attorney General Leticia James remarked, “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.”
California Attorney General Rob Bonta stated, “Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse.”
The postponement of the merger is expected to incur significant financial costs for Paramount. Starting October 1, Paramount must pay Warner shareholders a “ticking consideration” of approximately $650 million for each 90-day delay. If the deal is not finalized by June 4, 2027, Paramount would owe Warner $7 billion, as per the agreement approved by Warner shareholders.
A Paramount spokesperson confirmed that these fees remain unchanged by recent developments.
Paramount expressed in a statement its anticipation of the trial, emphasizing, “Today’s agreement is a significant win because 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.”
The merger has attracted attention beyond Hollywood due to links between Paramount’s leading family and President Trump, particularly as two significant newsrooms would fall under their control.
Oracle co-founder Larry Ellison, father of Paramount CEO David Ellison and known for his close ties to Trump, is a major financial backer of the merger. Trump has often criticized CNN as “fake news” and has shared his thoughts on potential changes for the cable news network.
