Paramount CEO Confident in Warner Bros. Deal Amid Antitrust Lawsuit

Paramount Skydance is proceeding with its planned $110 billion acquisition of Warner Bros. Discovery, despite a pending antitrust lawsuit. Paramount CEO David Ellison stated Tuesday that the company is open to an out-of-court resolution but is also confident in its ability to prevail in a trial, which a federal judge has scheduled for March.

Paramount announced mixed second-quarter financial results, with revenue increasing 1% to $6.91 billion, surpassing analyst expectations of $6.88 billion. This growth was driven by a 9% rise in streaming revenue to nearly $2.5 billion, bolstered by the addition of 2 million new subscribers to its Paramount+ service. The company attributed this increase to popular content such as the "Yellowstone" sequel "Dutton Ranch" and sporting events like the UFC Freedom 250 and the FIFA World Cup. Paramount’s studio business also saw revenue of $1.3 billion, benefiting from strong third-party sales and content licensing, though the theatrical slate was weaker than the previous year.

Offsetting these gains, the company’s television unit, which includes CBS and cable networks, experienced a 9% decline in revenue, falling to $3.1 billion. Overall profit for the quarter was $41 million, or 4 cents a share, below the analyst estimate of $109 million, or 9 cents a share.

Paramount has stated that the lawsuit, filed by California and 11 other states, does not accurately reflect the current competitive landscape of the entertainment industry. The company has agreed to pause the transaction until at least June 2027, awaiting the outcome of the antitrust case. If the deal is delayed until then, Paramount could face significant “ticking fees” to Warner Bros. shareholders, with a daily cost of $7 million if the merger does not close by September 30.

In an essay published Tuesday, Ellison addressed concerns about the merger, particularly regarding the future of CNN, and affirmed that the news network would remain independent as part of the deal. He emphasized his commitment to keeping CNN as part of Warner Bros. Discovery.

Paramount COO Andy Gordon noted that the company has consolidated its streaming services onto a single technology platform to enhance content promotion. Additionally, progress has been made in consumer products licensing, including a multi-year agreement with Mattel for the Teenage Mutant Ninja Turtles brand.