Paramount has agreed to delay its acquisition of Warner Bros. until at least June 1, 2027, or until a judge rules on a lawsuit filed by a coalition of 12 state attorneys general seeking to block the $110 billion merger. The agreement was reached Friday, with both parties required to submit a joint proposal regarding the trial schedule by July 31.
The proposed deal would combine two major Hollywood studios that operate streaming platforms HBO Max and Paramount+, as well as networks CNN and CBS.
The Writers Guild of America filed a similar lawsuit earlier this month, asserting that the merger would harm competition within the entertainment industry and potentially lead to fewer film and television productions.
This delay could incur significant costs for Paramount, which is contractually obligated to pay Warner Bros. shareholders a quarterly fee of $650 million for every period the deal remains uncompleted, starting in October.
Paramount described the delay as a "significant win" that offers a "direct path to a trial based on the evidence." The company stated that the transaction is beneficial for competition, consumers, and creators, a conclusion already reached by numerous international competition authorities. Paramount plans to argue that the plaintiffs' market definitions do not reflect the current marketplace realities and will not withstand scrutiny.
The coalition challenging the merger includes states such as New York, Massachusetts, New Jersey, and Colorado. New York Attorney General Letitia James called the decision a decision "a critical victory," stating that the proposed acquisition is detrimental to workers, artists, and consumers who rely on a competitive entertainment industry.
The Trump administration had previously approved the deal in the summer, expressing no concerns about its impact on industry competitiveness. David Ellison, Paramount CEO, is the son of billionaire Oracle co-founder Larry Ellison, a known ally of former President Donald Trump, who has made substantial campaign donations to Trump's previous political campaigns. David Ellison hosted Trump for a dinner during the Justice Department's review of the deal.
Concerns have also been raised regarding the future of Warner Bros.-owned CNN should the merger proceed. Over 200 journalists, academics, and filmmakers have signed a letter warning of potential "improper political meddling" at the network, though David Ellison has committed to maintaining "editorial independence."