Paramount Skydance has reached an agreement with an association of state attorneys general to postpone its merger with Warner Bros. Discovery – until after an antitrust lawsuit has been completed.
On Friday, the company filed a joint procedural document in the federal case, pledging not to complete the $111 billion transaction until five days after the trial is held—or by June 1, 2027, whichever comes first.
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After a possible share issue, Ellison will control both CNN and CBS. – As well as a majority of all film production in the United States.
The entire agreement is in jeopardy, not only because of the trial. – Both Paramount and the owner company Oracle are in a negative spiral.
A court date has not yet been set, but the deal will likely put the merger on hold for at least several months.
With Oracle’s share price at 50% in a year and huge investments and commitments in data centers, it is not at all certain that the world’s 4th richest can afford the purchase after the trial is over.
Several states took legal action
Earlier this week, a coalition of 12 states, led by California, was granted an interim injunction blocking the merger for 28 days, pending a decision on a preliminary injunction. The states claim that the agreement will weaken competition in both the cable TV and cinema markets, and that it must therefore be stopped.
New York Attorney General Letitia James stated:
“Halting this merger while our case is ongoing is a decisive victory in our efforts to uphold the law and protect the film and television industry. I look forward to continuing our cause to stop this illegal merger.
California Attorney General Rob Bonta described the agreement as a “huge victory”:
“Our argument against this illegal merger is simple: When too few companies gain too much power in markets that are central to American life, things become more expensive – and worse. Today’s agreement is great news for audiences, cinemas and all the many people who create the art, news and entertainment we love so much. We look forward to taking our case to court and celebrating another major victory in the work to ensure that this illegal merger never sees the light of day.
“The Trump connection didn’t help”
Norm Eisen, co-founder of the Democracy Defenders Fund and one of the initiators of the #BlocktheMerger campaign, also hailed the agreement as a victory for grassroots resistance:
“The Ellisons [the family behind the Paramount shooting] thought their relationship with President Trump would help them carry out a disastrous deal that threatens democracy, creative freedom and independent journalism. We in the #BlocktheMerger campaign helped to disprove them. This collective resistance is reversing the trend.
The Ellison family are also major supporters of Israel and through their company Oracle supplies advanced military technology IDF. – This means that many funds and investors cannot invest in the company.
Billions in daily fines
Paramount had previously been very keen to complete the deal before September 30 – when the company begins to incur a so-called “ticking fee” of $7 million per day, to be paid to Warner Bros. investors. The agreement is a tacit acknowledgement that this will not be possible – unless there is a settlement with the states.
Paramount had previously asked for a three-day hearing at the end of August, hoping to get the court’s blessing to finalize the deal in early September. But the states opposed this, arguing that they needed more time to gather evidence and prepare for a full trial.
A spokesperson for Paramount stated:
“Today’s agreement is a significant victory because the result is exactly what we have wanted from the start: a direct path to a trial based on evidence. This is the quickest and clearest way to prove that this transaction is good for competition, consumers and creators – a conclusion that dozens of competition authorities around the world have already reached.
Trial in 2027 at the earliest
The parties agreed to cancel the scheduled hearing on Aug. 3 in Oakland, and Judge Araceli Martinez-Olguin approved the joint pleading on Friday afternoon — about an hour after it was filed.
The Writers Guild of America also withdrew its own petition for an injunction after Paramount effectively admitted that it will not complete the deal until the antitrust case is settled.
The parties have also agreed to submit a joint progress plan by 31 July. The states have previously proposed that the trial be held in April 2027.
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