Paramount freezes $110bn Warner Bros. Discovery merger until 2027 after state antitrust suits

The delay agreement

Paramount Skydance filed a stipulation in federal court on Friday agreeing not to close its acquisition of Warner Bros. Discovery until a judge rules on the merits of the antitrust challenge or June 1, 2027, whichever comes first. The agreement, which must be approved by Judge Araceli Martínez-Olguín, would lift the need for a preliminary injunction hearing and cancel emergency court sessions. If the merger remains unconsummated after September 30, Paramount will pay Warner Bros. Discovery a ticking fee of 25 cents per share each quarter. Paramount described the move as a direct route to a trial on the evidence.

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.

Legal challenges

Twelve states, all led by Democratic attorneys general, sued to block the merger on July 13, arguing it would create a media behemoth that controls roughly 27 percent of wide-release theatrical film distribution and a similar share of basic cable channel licensing. California Attorney General Rob Bonta leads the coalition, which includes New York, Colorado, and nine other states. The Writers Guild of America filed its own lawsuit the following day, with WGA East president Tom Fontana warning the deal would suppress wages and eliminate opportunities for emerging writers. On July 21, Judge Martínez-Olguín granted a temporary restraining order, finding that the states had raised “serious questions” about the merger’s potential to substantially lessen competition.

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.

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.

Political and regulatory crosscurrents

The Trump administration approved the deal on June 12 without imposing any conditions, clearing a path for one of the largest media combinations in years. The approval surprised career staff at the Department of Justice, who had reportedly been leaning toward recommending a lawsuit. President Trump has publicly said he would weigh in on the merger, and the fate of CNN, a frequent target of his criticism, hangs in the balance. Two days before the US court freeze, the European Union granted conditional approval on July 23, requiring Paramount to terminate a major film distribution partnership with Universal Pictures in Europe.

What the merger would mean

Paramount and Warner Bros. Discovery are two of Hollywood’s five major film studios and two of the five largest owners of basic cable channels. The states argue that combining them would lead to higher prices, lower quality, and less content for audiences. Paramount counters that the tie-up is essential to compete with digital streaming giants and has pledged to release 30 films in cinemas each year, doubling its current output. The WGA and other opponents say the consolidation would reduce bargaining power for writers and crews, shrink project options, and limit viewer choice.

It remains our view that this merger is unlawful, and we will continue the fight to block it.

Next steps

With the delay stipulation in place, both sides must submit a proposed trial schedule by July 31. The case will now proceed directly to a merits trial, bypassing further preliminary skirmishes. If no ruling is issued by June 1, 2027, the plaintiff states and the WGA retain the right to seek a preliminary injunction to keep the companies apart. Until then, Paramount and Warner Bros. Discovery will continue to operate as completely separate, competing entities.