Paramount Skydance agrees to delay Warner Bros. Discovery acquisition amid state antitrust challenge

Paramount Skydance has agreed to pause its $110 billion acquisition of Warner Bros. Discovery until a ruling on several states’ challenge to the deal, or until June 1, 2027, according to court papers filed on Friday.

A group of 12 US states headed by California obtained a temporary restraining order this week that blocked the merger from closing for 28 days, pending the outcome of a motion for a preliminary injunction.

The states allege that the deal should be blocked because it will reduce competition in the cable and theatrical markets.

A Warner-Paramount merger would bring together two of the five last legacy studios in Hollywood, as well as a host of TV networks, titles filling streaming libraries and news operations. That would include Warner’s HBO Max and CNN coming under the same roof of Paramount-owned CBS, movies including Top Gun and the Paramount+ streaming service.

The delay could cost Paramount Skydance, controlled by the Ellison family, about $7 million a day in fees it agreed to pay Warner Bros. shareholders if the merger does not close by Sept. 30. Similar merger challenges have taken an average of eight months for a judge to rule on, a Reuters review of recent cases found.

Journalists at CBS News and CNN have expressed concerns about the possibility of the networks being merged and the likely resulting job losses. Press freedom groups have also voiced fears over political influence around the deal.

David Ellison and his father, Larry, a longtime Trump associate, have reoriented the CBS network in an editorial direction more favorable to the president, especially under the leadership of CBS News’s embattled editor-in-chief, Bari Weiss.

However, David Ellison pledged in March that CNN’s editorial independence would be protected amid speculation that he could put Bari Weiss in charge of the cable network.

At the time the deal was approved by the Trump administration in June, Elizabeth Warren, the progressive Democratic senator, said in a social media post that the development was “terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay”, adding that the merger “has reeked of corruption and influence-peddling”.

In a statement, Paramount said: “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.”

It added: “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 … We look forward to proving our case at trial.”