Paramount Skydance has eliminated the goal of closing the $110 billion acquisition of Warner Bros. Discovery by September. The company filed a voluntary court stipulation on July 24 agreeing to halt the transaction until five days after a judge rules on pending antitrust litigation, or June 1, 2027, whichever occurs first.
The delay follows a lawsuit filed on July 13 by a coalition of 12 state attorneys general, led by California Attorney General Rob Bonta. US District Judge Araceli Martínez-Olguín of the Northern District of California issued a temporary restraining order against the merger the same week the complaint was lodged. Paramount filed its agreement to pause the deal voluntarily, rather than under a direct court mandate.
Antitrust concerns and legal arguments
The states argue that the merger violates Section 7 of the Clayton Antitrust Act of 1914, which bars combinations likely to substantially lessen competition. The lawsuit contends the deal would reduce competition in three specific markets: wide-release theatrical film distribution, top-grossing movie distribution, and the market for distributing basic cable channels to providers.
The proposed transaction would combine major assets under Paramount Skydance chief David Ellison, including Paramount Pictures and Warner Bros. Pictures, streaming services Paramount+ and HBO Max, and news divisions CBS News and CNN. Film producers have warned that the consolidation could restrict access to news archives.
The stipulation is great news for audiences, theaters, and those who create our entertainment.
Bonta stated that the US federal government had abdicated its responsibility to challenge large corporate mergers, as state officials fill the enforcement gap. New York Attorney General Letitia James described the temporary pause as a critical victory for efforts to uphold the law and protect the film and television industries.
Regulatory background and next steps
The deal had previously cleared two significant regulatory hurdles. The US Department of Justice antitrust division declined to challenge the merger in June, and European regulators approved it around the same time. Despite these approvals, the Writers Guild of America filed a separate lawsuit alleging the deal violates federal antitrust law and would harm writers' pay and opportunities.
Paramount dismissed the states' case as wrong on both the facts and the law, calling it one of the weakest merger challenges it has encountered. The company has indicated it wants a trial as early as November, while the states may seek a proceeding in 2027. No trial date has been set, and both sides must submit proposed schedules by July 31.
The coalition suing to block the deal includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, alongside California. Bonta confirmed that the states intend to continue seeking a permanent order blocking the merger entirely.