Paramount puts Warner Bros. merger on hold after legal setback

Paramount agreed to postpone its proposed merger with Warner Bros. Discovery as it prepares for a lengthy antitrust battle with a coalition of state attorneys general challenging the deal.

The media company will not complete the transaction until after a court ruling or June 1, 2027, whichever comes first, signalling that the dispute is expected to stretch well into next year, Variety reported.

Paramount shifts strategy after court setback

The delay follows a ruling from U.S. District Judge Araceli Martinez-Olguin, who declined Paramount's request to speed up proceedings over a preliminary injunction.

California Attorney General Rob Bonta said the company likely recognised it faced an uphill battle in trying to block the injunction.

"I think they saw the writing on the wall," Bonta told Variety. "Otherwise, why not challenge it?"

Rather than continue fighting over a temporary injunction, Paramount will now focus on defending the merger during a full antitrust trial.

Trial could determine future of $111 billion deal

Paramount hopes the case will go to trial before the end of 2026, while the coalition of 12 states believes a 2027 timetable is more appropriate because of the complexity of the case.

The trial is expected to take place in federal court in Oakland, California, and could last several weeks.

In the meantime, Paramount will reportedly begin paying Warner Bros. Discovery shareholders about $7 million per day starting Sept. 30 because the deal cannot close as originally planned.

States seek structural changes

Bonta said the states intend to seek additional evidence during discovery and argued Paramount had not fully cooperated during the investigation.

He also said the company has not proposed structural remedies, such as selling assets, that could address the states' competition concerns.

Paramount maintains the merger will benefit consumers, creators and competition, noting that regulators in numerous other jurisdictions have already approved the transaction.

Bonta, however, argued the merger would reduce competition and ultimately lead to higher prices for consumers, saying the states remain focused on taking the case to trial.