Audiovisual giant Paramount Skydance has had to desist from its intention to close the process for the acquisition of its competitor Warner Bros. Discovery (WBD) before Septemper 30, 2026. Although the company has been getting regulatory approvals for the transaction in several parts of the world, it has encountered some obstacles in the United States. As a matter of fact, twelve US states, with California at the forefront, have brought legal action based on the assertion that the deal would inflict serious harm to free competition within the industry, as a consequence of which Paramount has entered a joint stipulation in the case together with the coalition of states to postpone the acquisition process until a court resolution has been issued or until June 1, 2027, whichever occurs earlier.
The reason behind Paramount’s intention to close the acquisition process before September 30 is that the agreement provides for a daily ticking fee of USD 7 million (approximately USD 600 quarterly) to be payable to WBD investors after the above-mentioned time limit.
It was in February 2026 that Paramount Skydance entered into an agreement to acquire Warner Bros. Discovery for an approximate amount of USD 111,000 million. The process was hindered when a few days ago a court temporary restraining order was issued to preclude the transaction from closing for an initial term of 14 days, in response to the petition made by the coalition of states. The agreement recently signed by the parties, which has been granted court approval, confirms that it will not be possible to close the deal, at least in the near future. A date has not been scheduled yet to hold the antitrust trial (*).
After the joint stipulation was made publicly known, both parties celebrated it as a partial victory. In a press release, the acquiring company asserted: “Today’s agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence. This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached.”
Meanwhile, two Attorney Generals spoke on behalf of the coalition of states. Leticia James, New York Attorney General, stated: “Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries. I look forward to continuing our case to stop this illegal merger.” At the same time, California Attorney General Rob Bonta described the agreement as a “tremendous win.” “Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse. Today’s agreement is great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy. We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day,” Bonta added.
(*) 08-04-26 Update: The date for the trial has been set by the Court: March 2 thru March 19, 2027.
