Paramount has agreed to a delay of its merger with Warner Bros. Discovery after a group of 12 states sued to stop the $111 billion deal. The states, led by California, brought the lawsuit over antitrust concerns, and Paramount has agreed to close the deal until five days after a potential trial is held or June 1, 2027, whichever comes first, according to a court filing.
The state Attorneys General successfully obtained a restraining order to pause the deal on Monday. The U.S. Justice Department had previously approved the merger in June, which didn’t come as much of a surprise given the politics of the parties involved. President Donald Trump is ideologically aligned with Paramount CEO David Ellison, the son of Larry Ellison, founder of Oracle.
Trump has frequently lashed out at perceived political enemies in the media, and Paramount has purged anyone insufficiently loyal to the president from CBS News and its flagship show 60 Minutes. Paramount acquired CBS News in its merger with SkyDance Media last year, and many people are concerned about what will happen with networks like CNN (which is owned by Warner Bro. Discovery) if this new deal goes through.
Variety notes that Paramount wanted to hold a three-day hearing on the merger in late August, but the state Attorneys General opposed that idea because it didn’t allow enough time to gather evidence and prepare for a trial.
Media reporter Justin Baragona shared the content of some text messages he received about the delay of the merger from CNN and CBS News employees. “Fuck the Ellisons!” one CBS News staffer reportedly told Baragona. “My reaction: fuck yeah!” a producer at CNN wrote.
Paramount is characterizing the delay as a win, according to Variety. The company seems confident it will come out on top.
“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,” a Paramount spokesperson told Variety.
“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,” the spokesperson continued. “Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.”
The Writers Guild of America has also filed a federal lawsuit arguing that a merger wouldn’t just violate antitrust law but also would specifically harm writers.
“With fewer competitors, the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers’ wages and reducing output. Writers will be paid less and have fewer employment opportunities,” the WGA suit explains.
It’s unclear where these latest developments leave the so-called “ticking fee” that’s included in the Paramount merger agreement. Paramount may have to pay a serious penalty to Warner Bros. Discovery if the deal isn’t closed by September 30. The financial penalty could amount to as much as $7 million per day, according to The Wrap.
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