Paramount Skydance has agreed to delay its proposed acquisition of Warner Bros. Discovery until as late as June 2027. According to CNBC, the multi-month postponement will ultimately raise the deal price as the $110 billion media tie-up faces a legal challenge from state antitrust regulators.
Antitrust Lawsuit and Court Injunctions
A group of state attorneys general led by California’s Rob Bonta filed a lawsuit to block the transaction over antitrust concerns, according to CNBC. A judge reviewing the case subsequently issued a temporary restraining order, triggering a near-term delay. Paramount had previously stated an intention to complete the transaction by the end of September.
Under the new agreement announced by Paramount, the company won’t complete its acquisition until the court rules on the states’ claims or until June 1, 2027, whichever comes first. In a public statement reported by CNBC, Paramount called the agreement a significant win that provides a direct path to a trial based on the evidence.
“The result is exactly what we have sought from the outset: a direct path to a trial based on the evidence,” Paramount said in its statement. “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.”
California Attorney General Rob Bonta defended the legal challenge in a statement to CNBC. “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,” Bonta said.
Financial Impact and Ticking Fees
Shares of Paramount Skydance fell 3% in afternoon trading following the announcement, according to CNBC. Under the terms of the revised agreement, Paramount will owe Warner Bros. Discovery shareholders a ticking fee starting September 30 if the deal remains delayed.
The fee adds 25 cents per share, per quarter until closing. According to CNBC’s reporting, this structure could amount to roughly $650 million in cash value every quarter, meaning a delay stretching to June 2027 could add approximately $1.7 billion to the total deal price. Should the transaction fall apart entirely, Paramount would owe Warner Bros. Discovery a $7 billion breakup fee.
Regulatory Approvals and Background
Paramount and Warner Bros. Discovery initially agreed to combine in February after a bid from the David Ellison-led company outpaced Netflix. The proposed $110 billion combination brings together two major Hollywood studios, two popular streaming services, and numerous television networks.
Regulatory paths have proven mixed across jurisdictions. Department of Justice cleared the proposed merger, and European antitrust regulators granted their approval shortly before the state-level lawsuit was filed, according to CNBC. However, U.S. state officials continue to argue that the tie-up reduces competition and threatens job losses within the film industry.
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