Paramount Skydance has agreed to delay its purchase of Warner Bros. Discovery to as late as next June as David Ellison’s media company mounts its defense to the antitrust challenge brought by California Atty. Gen. Rob Bonta and his coalition of 11 other state attorneys general.
The major concession comes as Paramount was facing an Aug. 3 hearing to try to convince U.S. District Judge Araceli Martínez-Olguín that its proposed $111-billion deal — which would reshape Hollywood with the combination of two historic studios — did not violate U.S. antitrust laws.
In a stipulation filed Friday, Paramount agreed to hold off on closing its blockbuster purchase until after the states’ antitrust case can be decided by the judge — or by June 1, 2027.
The move comes after Martínez-Olguín issued a temporary restraining order earlier in the week — requested by Bonta and the others — which paused the deal until the judge could hold a preliminary injunction hearing to decide whether to impose a lengthy moratorium.
Privately, Paramount officials were worried they might lose that round before Martínez-Olguín so, during negotiations with the states, Paramount stipulated that it would not close the deal on its preferred timetable.
“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,” a Paramount spokesperson said.
“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,” Paramount’s spokesperson said. “Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.”
Now Paramount will have to pay Warner Bros. Discovery investors more than the $31 a share it previously promised. The company had been hoping to finalize the purchase by late September to avoid a higher payout.
But so-called “ticking fees” of $.25 a share per quarter begin Oct. 1. If Paramount can’t close the deal by June 1, it would owe Warner Bros. Discovery a $7 billion breakup fee.
Martínez-Olguín on Thursday extended the restraining order for another 14 days — until Aug. 17 — in recognition that more time was needed for the case to get rolling.
With Friday’s agreement, the Aug. 3 preliminary injunction hearing will be canceled as the two sides prepare for a trial.
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