Paramount will not close its $81 billion merger with Warner Bros. Discovery until legal challenges are resolved or June 1, 2027, whichever comes first, the company said Friday.
The decision marks the latest setback for the deal, which faces antitrust challenges from 12 states and the Writers Guild of America. A California federal court had issued a temporary restraining order blocking the merger from closing within 28 days. A hearing next week on a preliminary injunction that could have further delayed the deal has been canceled.
The delay risks significant costs for Paramount. Its agreement with Warner includes a “ticking fee” requiring payments of roughly $650 million per quarter to Warner shareholders starting in October until the deal closes. Paramount had aimed to complete the transaction this month or before the fee kicked in. Its outside deadline is March 4, 2027, automatically extending to June 4, 2027, if only regulatory or governmental obstacles remain.
“Even if Paramount loses in District Court, this would accelerate the time frame for an appeal to the Ninth Circuit Court and potentially to the Supreme Court in 2027,” said Rich Greenfield of LightShed Partners. Forrester Research’s Mike Proulx noted: “The deal may still close or it may not. What we know is that the path to either outcome just got longer, messier, and likely more expensive.”
The combined company would control two major movie and television studios, the CBS network, cable channels including CNN, and the streaming services Paramount+ and HBO Max. Paramount argues the merger would strengthen competition against Netflix and other streaming giants and that the states’ market definitions do not reflect today’s landscape.
“This transaction is good for competition, good for consumers, and good for creators,” the company said Friday.
The states, led by California, contend the deal would raise prices, lower quality, and reduce content. In granting the restraining order, U.S. District Judge Araceli Martínez-Olguín cited the combined film studios’ theatrical market share as grounds to presume the merger is likely to violate antitrust laws.