Paramount Skydance Delays Warner Bros. Deal Amid Antitrust Challenge

Paramount Skydance announced it will delay closing its proposed $111 billion purchase of Warner Bros. Discovery until after a U.S. antitrust trial or June 1 2027, whichever comes first. The move follows a temporary restraining order issued by U.S. District Judge Araceli Martínez-Olguín at the request of California Attorney General Rob Bonta and 11 other state attorneys general, who argue the merger would violate the Clayton Antitrust Act.

The parties had been scheduled for an August 3 hearing to persuade the judge that the combination of studios and networks—including HBO, CBS, CNN, Comedy Central, Nickelodeon and TBS—would not harm competition. After the judge extended the restraining order through August 17, Paramount and the states reached a stipulation that the deal will not be completed on the company’s original timetable.

In a statement, Bonta said the delay is “great news for audiences, movie theaters, and the many people who write, build, and create the art, news and entertainment.” A Paramount spokesperson called the agreement “a significant win” and said it provides a “direct path to a trial” to demonstrate that the transaction benefits competition, consumers and creators.

The European Commission and more than 40 other jurisdictions have already approved the merger, and the U.S. Justice Department signed off last month. However, the antitrust case in California could push the closing date back several years, triggering additional deal costs, legal fees and a potential $7 billion breakup fee if the deadline is missed.

Shares of Paramount fell 3.3% to $8.21 after the announcement, while Warner Bros. Discovery’s stock dropped to $25.77, erasing gains made after the restraining order. The delay also affects the proposed $887 million exit package for Warner CEO David Zaslav, whose tax obligations may no longer be covered by the board if the merger is postponed.

The lawsuit, filed by a coalition of Democratic attorneys general from states including New York, New Mexico, Nevada, Colorado, Oregon and Washington, alleges the merger would reduce competition in theatrical distribution, blockbuster film markets and cable television. Paramount contends that the combined streaming services would still trail major platforms such as Netflix, YouTube, Amazon Prime and Disney+.

The preliminary injunction hearing scheduled for August 3 has been cancelled as both sides prepare for trial. Bonta reiterated the states’ intent to “ensure this unlawful merger never sees the light of day.”