Executives at Paramount and Warner Bros. Discovery are reportedly bracing for a potential judicial block on their $110 billion merger in the coming days, a move that could place the deal on hold for several weeks as it approaches a critical deadline. The companies had aimed to finalize the transaction next week, but a group of 12 Democratic state attorneys general submitted a request for a temporary restraining order on Monday, arguing the acquisition raises antitrust concerns.
Sources close to the matter anticipate the restraining order will be granted, potentially pausing the deal for at least two to three weeks. This delay could push the companies closer to an October 1 deadline, at which point a significant financial penalty, known as a “ticking fee,” would begin to accrue. This fee adds 25 cents per share to the merger cost for each quarter the deal remains incomplete.
Despite the potential setback, executives remain optimistic about the deal's eventual completion, noting it has already received approval from the Trump administration. "The deal will get done one way or another," one executive told CNN.
A temporary halt could also prolong uncertainty regarding the future ownership of CNN and its editorial independence. This concern has reportedly caused anxiety among star anchors and staff, particularly following Paramount boss David Ellison's appointment of Bari Weiss to lead CBS News.
The lawsuit, led by California Attorney General Rob Bonta, asserts that the merger would violate antitrust laws by potentially increasing prices for consumers and negatively impacting the struggling movie theater industry. The proposed combination would consolidate major media assets, including HBO Max, Paramount+, HBO, CBS, and CNN, under a single corporate umbrella. It would also bring together thousands of film titles and television series.
According to the complaint, the merged entity would command nearly one-third of the U.S. theatrical film distribution market and almost one-third of the nation's basic cable programming. This lawsuit was filed shortly after reports surfaced that advisors to Ellison had urged him to consider relocating Paramount's Los Angeles headquarters and shifting as much as $30 billion in planned spending outside California if Bonta pursued legal action.
Federal Communications Commission Chair Brendan Carr expressed skepticism about the lawsuit's chances of success, stating that it "really isn’t a legitimate antitrust case." Paramount has consistently defended the merger against antitrust criticisms, highlighting its approval by various global regulators, including the U.S. Department of Justice, and maintaining its target of closing the deal by the end of September.
Questions have been raised about the U.S. Department of Justice's approval of the deal, with some opponents suggesting potential ties to the White House, given the public praise received by David Ellison and his father, Oracle founder Larry Ellison, from President Trump. The deal has also faced scrutiny internationally, with UK officials indicating potential intervention and the European Union requiring Paramount to offer concessions for approval.
A federal judge in California has scheduled a hearing for Friday to review the states' request for a temporary restraining order. Should the order be granted, the legal battle would proceed to a preliminary injunction phase, which could extend the deal's hold for several more months.
The merger is also confronting additional legal challenges. A lawsuit filed in April on behalf of Paramount+ subscribers alleges that the deal would lead to increased subscription prices and reduced consumer choice. The Writers Guild of America filed its own lawsuit Tuesday, arguing the acquisition would harm American movie and TV writers by diminishing the number of potential buyers in Hollywood. Furthermore, a fourth lawsuit was filed Tuesday by Paramount investors who accuse David and Larry Ellison of entering into an illicit agreement with Trump for the deal's approval, which they claim included commitments to alter CNN's operations and a $16 million settlement with CBS.
Despite these accumulating legal hurdles, Paramount maintains its expectation to close the deal by September. "The company believes strongly in this, and they would take this up to the Supreme Court if they had to," stated Jeffrey Kessler, Paramount’s lead counsel, on Tuesday, confirming the company's intent to appeal any judge's approval of a temporary restraining order.