Paramount Skydance agreed to a long-term delay in its $111 billion acquisition of Warner Bros. Discovery, preventing the companies from combining until a judge rules on the merits of a case in which a dozen states challenged the legality of the merger.
under a stipulation Filed in court today, the states and companies agreed that the merger will not be completed and the firms will not integrate their operations until “five days after the substantive determination in these matters,” or June 1, 2027, whichever comes first. The delay was also accepted by the Writers Guild of America, which filed its own lawsuit to block the merger. If there is no substantive determination by June 1, the plaintiffs could seek a preliminary injunction to continue blocking the deal.
The agreement amounts to “a months-long suspension” of the merger, according to the office of New York Attorney General Letitia James. saying. “Stopping this merger while our case moves forward is a critical victory in our efforts to enforce the law and protect the film and television industries,” James said.
Paramount also claimed victory, tell the media that “the result is exactly what we have sought from the beginning: a direct path to an evidence-based trial. This is the fastest and clearest way to demonstrate that this transaction is good for competition, good for consumers and good for creators, a conclusion that dozens of competition authorities around the world have already reached.”
Led by California, 12 states sued Paramount and WBD and won a temporary restraining order against the merger on Monday. Judge Araceli Martínez-Olguín of the United States District Court for the Northern District of California concluded that the agreement is likely to substantially reduce competition and violate antitrust laws.
The states sued after the Trump administration green-lighted the merger. US approval reportedly surprised staff attorneys at the US Department of Justice. who led the agency’s investigation into the deal and were leaning toward recommending a lawsuit to block it.
The states say the merger will eliminate competition by combining two of the five major Hollywood movie studios and two of the five major owners of basic cable TV channels. “We look forward to continuing to present our case in court and celebrating another tremendous victory in our effort to ensure this illegal merger never sees the light of day,” said California Attorney General Rob Bonta. saying today.
