Paramount has agreed to delay closing its $81 billion acquisition of Warner Bros. Discovery until at least June 2027, a stunning development that comes as a federal judge considers a challenge from 12 states seeking to block the deal entirely.
In a court filing Friday, Paramount said it would not move forward with the transaction until either June 1, 2027, or five days after the court issues a ruling on the states’ antitrust lawsuit — whichever comes first. Both parties also agreed to cancel a preliminary injunction hearing that had been scheduled for August 3, instead agreeing to file a joint statement on trial scheduling by July 31.
The agreement extends a temporary restraining order granted Monday by U.S. District Judge Araceli Martínez-Olguín of the Northern District of California, who found the 12-state coalition had raised “serious questions” about the merger’s potential to substantially lessen competition. The judge noted the balance of equities and the public’s interest in antitrust enforcement tipped sharply in favor of pausing the deal.
The coalition of states, led by California Attorney General Rob Bonta, sued to block the merger on July 13, arguing in a 38-page complaint that it would extinguish competition in three markets: wide-release theatrical film distribution, anticipated top-grossing movie distribution and the cable channel licensing market. The states contend the transaction violates Section 7 of the Clayton Antitrust Act, which bars mergers likely to substantially lessen competition. Bonta called the initial restraining order a “critical first win.”
Paramount rejected the states’ framing as “wrong on both the facts and the law” and called their market definitions one of “the weakest merger challenges in modern antitrust.” The company said the filing provides a “direct path to a trial based on the evidence” and noted that dozens of competition authorities around the world have already approved the deal.
The financial stakes of the delay are significant. Starting October 1, Paramount must pay Warner shareholders a ticking fee of roughly $650 million for every 90 days the deal is held up. If the transaction is not completed by June 4, 2027, Paramount will owe Warner a $7 billion breakup fee.
The proposed combination would join Paramount Pictures and Warner Bros. Pictures, the Paramount+ and HBO Max streaming services, and CBS News and CNN under the leadership of 43-year-old Skydance Media founder David Ellison — creating one of the largest media companies in the world from two of Hollywood’s last five legacy studios.