Paramount-Skydance Deal Paused Amid Antitrust Lawsuit

Paramount Skydance has agreed to suspend its $111 billion acquisition of Warner Bros. Discovery until a court rules on the antitrust case brought by a coalition of 12 state attorneys general and the Writers Guild of America. The pause agreement stipulates that the transaction will not close until five days after a final ruling or until June 1, whichever occurs first. The parties will update the court by July 31 and have cancelled the preliminary-injunction hearing set for August 3.

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The deal, announced in early 2026, would combine Paramount Skydance’s film and streaming assets with Warner Bros. Discovery’s HBO Max, studios and distribution network. The U.S. Department of Justice and the European Commission had cleared the merger, and regulators in 65 jurisdictions either approved it or declined to challenge it.

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State-level opposition began when California Attorney General Rob Bonta filed a lawsuit on July 13, joined by 11 other attorneys general, alleging the merger would reduce competition in the movie-and-TV market. The WGA filed a separate antitrust suit in the Northern District of California.

All hope might not be lost in the Paramount-WBD merger

• Deal value: $111 billion.

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• Financing: $24 billion from sovereign-wealth funds of Saudi Arabia, Qatar and the UAE, which would own 38.5 % of the combined company but hold no voting shares.

David Ellison Tells Paramount Staff Merger Delay Won't Derail $111 Billion Warner Bros. Discovery Deal

• “Ticking fee”: $7 million per day payable to Warner Bros. Discovery shareholders if the deal remains unclosed after September 30; the cap is $1.95 billion through June 1.

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• Regulatory coverage: approvals or non-challenges in 65 jurisdictions, including the EU, Australia, China, Germany, France, Spain, Canada and South Korea.

David Ellison Tells Paramount Staff Merger Delay Won't Derail $111 Billion Warner Bros. Discovery Deal

• SAG-AFTRA leadership, represented by President Sean Astin and National Executive Director Duncan Crabtree-Ireland, adopted a resolution demanding “enforceable safeguards against reduced production” and higher U.S. production percentages.

Deadline Hollywood

• Rob Bonta and the coalition argue the merger would “stifle competition” and raise prices for consumers, seeking a trial that could extend into 2027.

David Ellison Tells Paramount Staff Merger Delay Won't Derail $111 Billion Warner Bros. Discovery Deal

The WGA says the merger is unlawful and will continue its fight to block it. SAG-AFTRA’s resolution mirrors the writers’ concerns about potential cuts to U.S. production. State attorneys general contend the combined entity would dominate distribution, limiting choices for independent creators and audiences.

Deadline Hollywood

• Trial timing: Paramount’s legal team prefers a fall-2026 trial, while the states push for a 2027 schedule. No definitive date has been set.

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• Financial impact: Analyst Hernan Lopez (Owl & Co.) calls the ticking-fee cost “not a huge deal,” yet the fee could total $1.95 billion, potentially affecting the purchase price by more than 1 % if the delay extends a full year.

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• “We believe this is the right path because the facts and the law are on our side, and a full hearing will demonstrate why the plaintiffs’ arguments should not prevail.” — David Ellison, Paramount CEO

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• “It's a lot of money in absolute dollars, but it's not a huge deal,” — Hernan Lopez

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Paramount and the state attorneys general will meet this week to discuss trial dates and must file a status report by July 31. The parties have agreed to forgo the August 3 preliminary-injunction hearing and move directly to a trial on the merits. Depending on the court’s schedule, the merger could remain frozen until a ruling is issued or until June 1, when the ticking-fee cap expires, potentially pushing the closing into 2027.

Variety Magazine