Paramount has agreed to pause its planned $111 billion acquisition of Warner Bros. Discovery while two legal challenges move through court, potentially delaying the merger for many months.
In a filing Friday in federal court in California, Paramount said it will not take steps to close the deal until June 1, 2027, or until five days after the lawsuits are resolved, whichever comes first. A U.S. district judge, Araceli Martínez-Olguín, earlier granted a temporary restraining order pausing the acquisition; she has not yet signed Paramount’s most recent agreement.
The proposed combination would bring together the companies’ film studios, streaming services Paramount+ and HBO, dozens of cable channels, and news and broadcast properties including CBS and CNN.
Two lawsuits have put the deal on ice: one brought by a coalition of 12 state attorneys general and another filed by the Writers Guild of America. Both suits argue the merger would reduce competition across film, television, streaming and news markets, harming consumers and the creators and journalists who supply programming and reporting.
New York Attorney General Letitia James hailed the pause as “a critical victory in our efforts to uphold the law and protect the film and television industries.” California Attorney General Rob Bonta said, “When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse.”
The delay carries significant financial consequences for Paramount. Under the merger terms, starting Oct. 1 the company owes Warner a ‘‘ticking’’ fee of about $650 million every 90 days the deal is delayed. If the transaction has not closed by June 4, 2027, Paramount would face a $7 billion payment to Warner, a provision approved by Warner’s shareholders.
A Paramount spokesperson said those fees remain in effect. Paramount also issued a statement saying the agreement ‘‘is a significant win’’ because it creates “a direct path to a trial based on the evidence,” and that the company intends to show the deal is “good for competition, good for consumers, and good for creators,” noting that multiple competition authorities worldwide have already cleared aspects of the transaction.
Outside of antitrust questions, the deal has drawn scrutiny because of the Ellison family’s role in financing it. Oracle co-founder Larry Ellison, who is bankrolling much of the merger, is the father of Paramount CEO David Ellison and has been described as a close ally of former President Donald Trump. Critics have cited concerns about two major newsrooms—most notably CNN—coming under the influence of a family connected to Trump; Trump has repeatedly criticized CNN in the past and publicly speculated about constraining the network.
With the pause in place, the case will proceed toward trial as the courts consider whether the merger lawfully threatens competition in key U.S. media markets. The outcome will determine whether Paramount and Warner can complete the deal, how long the delay lasts, and what financial penalties will ultimately apply.