Paramount agrees to months-long delay of Warner Bros. merger

Key Points:

• Paramount Skydance has agreed to delay its $111-billion acquisition of Warner Bros. Discovery until after a trial or June 1, 2027, in response to an antitrust lawsuit filed by California Attorney General Rob Bonta and 11 other states.
• U.S. District Judge Araceli Martínez-Olguín had issued a temporary restraining order halting the deal, citing concerns that the merger could violate the Clayton Antitrust Act by concentrating too much market power in the combined company.
• Paramount faces increased costs due to the delay, including "ticking fees" of 25 cents per share per quarter and a potential $7-billion breakup fee if the deal does not close by June 2027; the company remains confident it will prove the merger is beneficial in court.
• The merger has received regulatory approval in more than 40 jurisdictions, including the European Commission and the U.S. Justice Department, but faces opposition from state attorneys general, the Writers Guild of America, and parts of the entertainment industry.
• The delay impacts Warner Bros. Discovery CEO David Zaslav’s proposed $887-million exit package, as Warner is not obligated to cover his tax liabilities if the deal extends into 2027, adding further uncertainty to the merger timeline.