Paramount-Warner Merger Frozen Until 2027 as States Win Court Battle

The proposed $111 billion merger between Paramount Skydance and Warner Bros. Discovery is now on ice until at least June 2027, after a coalition of 12 US states secured a temporary court block and both companies agreed to delay closing. The financial stakes are steep: Paramount must pay Warner Bros. shareholders $7 million for every day the deal runs past September 30, 2026.

The block

A federal court in California issued a temporary restraining order in late July, halting a deal that the Trump administration's Department of Justice had already approved in June. Twelve state attorneys general — led by California AG Rob Bonta — filed suit on July 13, arguing the merger would concentrate too much power in theatrical distribution and cable TV licensing, squeezing out competition. Both Paramount and Warner Bros. then jointly agreed to push the closing deadline to June 1, 2027, or five days after a trial concludes, whichever comes first, per Deadline.

The Writers Guild of America filed a separate antitrust suit on labor grounds, adding another legal front for the companies to navigate. A preliminary injunction hearing is set for August 3.

What's on the table

The deal would hand Paramount Skydance ownership of some of the most valuable franchises in entertainment: Harry Potter, the DC Comics Universe, Game of Thrones, The Lord of the Rings, The Matrix, and Mad Max. Warner Bros. Games — home to studios like Rocksteady, NetherRealm, and Avalanche Software — would also fall under Paramount's umbrella, bringing franchises including Batman: Arkham, Mortal Kombat, and Hogwarts Legacy.

Paramount has positioned itself as the underdog competing against streaming giants like Netflix and Amazon, framing the merger as pro-competitive. That argument has so far not moved the states, according to Variety.

The cost of waiting

The ticking fee — roughly $650 million per 90-day period after September 30 — creates enormous pressure to settle quickly. Paramount's stock dropped to a one-year low after the delay was announced. The European Commission cleared the deal on July 22, contingent on Paramount divesting its stake in United International Pictures, the film distribution joint venture it runs with Universal. The UK's Competition and Markets Authority is expected to publish its own findings by August 7.