Paramount has proposed delaying its $111 billion merger with Warner Bros. Discovery until June 2027 to allow a full courtroom trial to resolve mounting antitrust litigation from several state attorneys general. The media company, led by David Ellison and backed by his father, Larry Ellison, the Oracle co-founder, faces a legal challenge aimed at blocking the deal over concerns it would concentrate too much power in the film and entertainment industry.
The states, which filed the lawsuit in mid-July, argue that the merger would give the combined company an outsized influence over theatrical film releases, particularly blockbuster titles that generate substantial revenue for studios. Paramount counters that the states are overlooking the competitive presence of streaming platforms like YouTube and Netflix, accusing regulators of having a narrow view of the industry.
The legal battle has already resulted in two temporary court-ordered pauses on the merger. Initially resistant, Paramount shifted its position in a late Thursday call by offering to halt the acquisition until June next year. Jeffrey Kessler, Paramount’s lead trial lawyer and co-executive chairman of Winston Taylor, suggested forgoing preliminary legal skirmishes and moving directly to trial as the fastest path to finalize the deal. Both Paramount and the states welcomed the agreement as a way to establish a clear trial schedule.
The lawsuit remains among the last significant hurdles to the merger after the federal Justice Department declined to challenge the acquisition. California Attorney General Rob Bonta called the agreement to delay the merger “great news” and emphasized the states’ intent to vigorously pursue their case. A spokesperson for Warner Bros. Discovery declined to comment.
Legal experts note that Paramount’s willingness to wait until June signals a strategic attempt to demonstrate cooperation to the presiding judge, Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California. However, the company also plans to move as swiftly as possible within the court’s framework. Paramount has recruited veteran litigator Beth Wilkinson, noted for successfully defending Microsoft’s 2023 Activision acquisition, to lead its defense against the states.
A key point of contention remains the timing of the trial. Paramount seeks a November start date, while the states prefer a trial in 2024, indicating ongoing difficulties in agreeing on a court calendar. The litigation will also affect a range of Warner Bros.-owned properties, including news network CNN and streaming service HBO, both facing an uncertain future as the merger remains unresolved.
Paramount faces financial consequences for any further delay. The company agreed to pay Warner Bros. Discovery shareholders $650 million for each quarter the merger is postponed beyond October, and a $7 billion breakup fee should the deal ultimately collapse.
Industry opposition to the merger has extended beyond regulators. The Writers Guild of America has publicly opposed the deal, expressing concerns about its potential impact on screenwriters and the broader creative community. As the legal proceedings unfold, the outcome is poised to significantly influence the future of Hollywood’s major studios and their competitive landscape.