Paramount-Warner Bros. merger delayed to 2027 as antitrust trial advances

Paramount Skydance and Warner Bros. Discovery have agreed to suspend their $110–111 billion merger and halt operational integration until either a federal court rules on antitrust claims or June 1, 2027, whichever comes first. The delay follows a temporary restraining order issued by U.S. District Judge Araceli Martínez-Olguín, who found that a coalition of 12 state attorneys general led by California had raised "serious questions" about the deal's potential to "substantially lessen competition." A separate lawsuit filed by the Writers Guild of America also challenges the merger under federal antitrust law.

The stipulation, filed Friday, cancels the August 3 preliminary injunction hearing and sets the case on a path toward full antitrust trial. Both sides framed the agreement as a tactical victory. Paramount stated it had secured "a direct path to a trial based on the evidence" and maintains the transaction is "good for competition, good for consumers, and good for creators." California Attorney General Rob Bonta called the delay "a critical victory" in protecting the entertainment industry, arguing that combining two of Hollywood's five major film studios and two of five major basic cable channel owners would "extinguish competition" and harm consumers, movie theaters, and content creators.

The states argue the merger violates the Clayton Act across three markets: theatrical film distribution, anticipated top-grossing film distribution, and basic cable channel licensing. Paramount counters that the market definitions are outdated and that streaming platforms and tech giants now dominate entertainment, making the merger necessary to compete. The U.S. Department of Justice approved the deal in June under the Trump administration, a decision that reportedly surprised DOJ staff lawyers who had leaned toward recommending a lawsuit. The European Commission granted conditional approval in July, requiring Paramount to exit a film distribution joint venture with Universal in Europe.

The delay adds financial pressure on Paramount, which will owe Warner Bros. Discovery shareholders a 25-cent-per-share "ticking fee" quarterly if the deal remains incomplete after September 30. The parties are working to establish a trial schedule, with Paramount seeking a November date and California requesting a 2027 trial to allow for expert discovery. If no merits determination occurs by June 1, 2027, the states may seek a preliminary injunction to block the deal indefinitely.