Paramount Agrees to Pause $110 Billion Warner Bros. Merger Until Trial or June 2027

Paramount Skydance on Friday agreed to pause its $110 billion acquisition of Warner Bros. Discovery until after a ruling on the antitrust challenge brought by 12 U.S. states, or until June 1, 2027, whichever comes first, according to court papers.

The deal, which would unite Paramount Pictures and Warner Bros. Studios along with streaming services Paramount+ and HBO Max and networks CBS and CNN, has been frozen by the agreement. U.S. District Judge Araceli Martínez-Olguín had already granted a temporary restraining order earlier this week blocking the deal for several weeks. The new agreement extends that pause and pushes the closing timeline deep into next year at the earliest.

Under the terms filed Friday, Paramount said it shall “not close, be consummated, or otherwise be completed” until five days after the outcome of an antitrust trial, or June 1, 2027, whichever is earliest. The company also agreed it will “not take any steps, directly or indirectly, to integrate or consolidate their operations pursuant to the Transaction.”

The delay carries significant financial risk for Paramount. Starting Oct. 1, the company must pay Warner Bros. Discovery shareholders a “ticking consideration” of roughly $7 million per day — or about $650 million every 90 days — if the deal does not close by Sept. 30. If the pause stretches to June 2027, Paramount could owe as much as $1.7 billion in ticking fees, according to multiple sources. In addition, if the deal is not closed by June 4, 2027, Paramount would owe Warner a $7 billion break-up fee, as reported by TheWrap.

Paramount shares fell 3.3% on Friday, according to the Miami Herald. They are down 37% this year. Warner Bros. Discovery shares slid just under 1%, the New York Post reported.

**'A direct path to trial'**

Paramount characterized the agreement as a strategic win, arguing it bypasses preliminary injunction proceedings and moves directly to a trial on the merits.

“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 said in a statement. “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 company added: “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 agreement ends the immediate fight over a preliminary injunction. In exchange for Paramount’s pause, the states and the Writers Guild of America — which filed its own separate lawsuit — agreed to withdraw their requests for preliminary injunctions. Both sides will submit a joint statement on trial scheduling by next Friday, TheWrap reported.

The states, led by California, sued on July 13, arguing the deal would “extinguish competition” in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers.

“Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” New York Attorney General Letitia James said in a statement.

California Attorney General Rob Bonta said: “Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse.”

The Writers Guild also weighed in: “It remains our view that this merger is unlawful, and we will continue the fight to block it,” as quoted by TheWrap.

**High stakes and political scrutiny**

Similar merger challenges have taken an average of eight months for a judge to rule, according to a Reuters review of recent cases cited by multiple sources.

The proposed deal has drawn scrutiny beyond antitrust concerns. The merger is largely bankrolled by Oracle co-founder Larry Ellison, the father of Paramount CEO David Ellison and a close ally of President Donald Trump. Journalists at CBS News and CNN have expressed concerns about potential job losses and political influence over the combined news operations, the Guardian reported.

David Ellison pledged in March that CNN’s editorial independence would be protected, but press freedom groups have voiced fears, and Democratic Senator Elizabeth Warren called the deal “terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay,” according to the Guardian.

The 12 states suing are led by California and include New York, Connecticut, Oregon and Arizona, the New York Post reported.

Paramount said in its statement that it “looks forward to going to trial” and believes it will win. The company pointed to approval from “dozens of competition authorities around the world” as evidence the deal is pro-competitive.