Paramount and Warner Bros. Discovery Merger Delayed for Months as States’ Lawsuit Proceeds

Paramount Skydance has 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 merger’s legality. Under a stipulation filed in court, the merger will not be completed and operations will not be integrated until five days after a merits determination or 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 no merits determination occurs by June 1, plaintiffs may seek a preliminary injunction to keep blocking the deal.

New York Attorney General Letitia James called the agreement “a months-long halt” to the merger and “a critical victory in our efforts to uphold the law and protect the film and television industries.” Paramount also claimed victory, stating that the result is exactly what it sought: a direct path to a trial based on evidence, which is the fastest and clearest way to prove the transaction benefits competition, consumers, and creators. The company noted that dozens of competition authorities worldwide have already reached that conclusion.

Led by California, 12 states sued Paramount and WBD and won a temporary restraining order on Monday. Judge Araceli Martínez-Olguín of the US District Court for the Northern District of California found the deal likely to substantially reduce competition and violate antitrust laws. The states sued after the Trump administration approved the merger, a decision that reportedly surprised DOJ staff who investigated the deal and leaned toward recommending a lawsuit to block it. The states argue that the merger would eliminate competition by combining two of the five major Hollywood movie studios and two of the five major owners of basic cable TV channels.