Paramount-WBD Merger Clears Antitrust Hurdle but Faces Judge’s Delay as $7.5 Billion Debt Syndication Begins

Paramount Global took a major step toward closing its $111 billion acquisition of Warner Bros. Discovery by launching a $7.5 billion senior secured term loan syndication on Thursday, the company said. The move follows a Monday settlement of an antitrust lawsuit brought by a dozen state attorneys general led by California’s Rob Bonta, which cleared the last regulatory hurdle for the merger.

But the deal’s final timetable remains uncertain. U.S. District Judge Araceli Martinez-Olguin, in a virtual hearing Thursday, declined to immediately approve the consent decree underlying the settlement. She ordered lawyers to address by September 29 concerns raised by Sen. Cory Booker (D-NJ), who had sent a letter asking for an independent public-interest review. Martinez-Olguin questioned whether the decree adequately addresses Clayton Act concerns and whether the settlement process was sufficiently arm’s-length, according to remarks during the hearing.

The judge’s hesitation came despite arguments from California Senior Assistant Attorney General Paula Blizzard, who defended the settlement as “the best solution” and noted the states were prepared to go to trial on March 2, 2027 if the decree were rejected. Blizzard acknowledged the “large amount of controversy” the deal has generated, calling many concerns “outside antitrust.”

Opponents of the merger filed an emergency motion Thursday to formally oppose the settlement, which Judge Martinez-Olguin granted. A coalition including Free Press, the Committee for the First Amendment, and the Future Film Coalition said in a statement: “The consent decree the state AGs agreed to in a backroom deal is weak, unenforceable, and leaves workers, journalists, and consumers in the dust.” The group described the tentative deal as “dangerous for democracy.”

**Debt and Equity Financing**

Paramount intends to raise approximately $44.4 billion of additional secured debt beyond the $7.5 billion loan now in syndication, according to the company. Combined with previously announced financing, net proceeds will fund the purchase price and repay existing debt. Morgan Stanley analysts estimated the merged entity would have net debt of $77.2 billion at the end of 2026, a figure likely to rise after the new borrowing.

Bank of America, Citigroup, and Apollo Global Management are underwriting the debt package, one of the largest ever assembled for a leveraged buyout.

On the equity side, Oracle founder Larry Ellison has personally guaranteed over $40 billion in financing, according to multiple sources. A separate report by Semafor said Ellison has guaranteed $46.7 billion. Sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates have committed $24 billion, which would give them a combined 38.5% stake in the combined company, Paramount said.

Paramount is also considering whether to bring tech billionaire Elon Musk in as an equity investor, according to a report from Semafor cited by multiple outlets. Paramount did not comment, and Musk did not respond to a request for comment. The report spurred unease among staff at CNN, which is owned by Warner Bros. Discovery, with one source telling Semafor: “It’s really scary given what he did at X and DOGE.”

**Industry Implications and Settlement Terms**

The merger itself reflects a broader shift in media as traditional companies struggle to compete with Big Tech streaming giants, industry executives said at a Financial Times Business of Entertainment Summit on Thursday.

“Tech came in and said, ‘We can build a better mousetrap on the distribution side,’” said David Hernand, a partner at Simpson Thacher, whose firm is not involved in the deal. Traditional companies reliant on broadcast and cable “are trying to play catch-up,” he said.

Aaron Sobel, a private equity partner at Apollo, which provided one-third of the merger’s financing, said the deal gives legacy media a fighting chance. “I don’t think you can overstate how important getting that deal done was,” Sobel said. “You had two companies that arguably couldn’t have existed without combining.”

The settlement’s key terms include a commitment from Paramount to release 30 films in theaters each year for the first two years, rising to 32 after that, with at least four independent films annually. The consent decree defines a “tentpole” film as one with a minimum $50 million budget and a wide release of 3,000 screens within its first four weeks – a threshold some industry executives consider low, according to a Page Six report.

If Paramount misses those delivery targets, it must sell Miramax Studios and pay $30 million for each film it falls short, according to a report from Semafor cited by ZeroHedge. Paramount also committed to spending an additional $1.5 billion on domestic production over five years and to raising the share of domestic production from 5% to 20% of all films, or 30% if Congress passes certain tax credits.

The settlement also creates “News Editorial Independence Boards” for CBS and CNN, each comprised of five established journalists. Critics, including the Freedom of the Press Foundation, have called the boards “worthless” and a “First Amendment nightmare,” fearing they could invite government interference in newsroom decisions.

**Background and Future M&A**

California Attorney General Rob Bonta was secretly advised during negotiations by a consortium of Hollywood insiders led by Academy Award-winning producer Charles “Chuck” Roven, according to a Page Six report. A source said Roven helped Bonta understand the industry’s financial underpinnings without taking a side.

The merger remains the largest in a wave of consolidation. At the FT summit, panelists said the combination is likely to trigger further deals. Hernand suggested NBCUniversal, which Comcast plans to spin off by mid-2027, could consider breaking up further, potentially combining Universal with Sony. Sobel said Comcast’s controlling shareholder structure limits options but added that “Netflix and Comcast down the digital and the media side should probably come together at some point.”

Paramount and Warner Bros. currently have 10 weekends over the next two years with competing films scheduled on the same date, according to Rentrak analyst Paul Dergarabedian. Warner Bros. has already moved “Gremlins 3” back nearly a year to avoid a clash. The merged company’s release calendar is expected to face ongoing adjustments.

Judge Martinez-Olguin said she will issue a ruling “in due course.” Paramount faces a ticking fee of $7 million per day beginning October 1 if the merger does not close. The company has said it expects to complete the acquisition within roughly two weeks of court approval.