Paramount Skydance agreed to suspend its plan to acquire Warner Bros Discovery for $110 billion until a federal court resolves the case. According to court filings on Friday, the company will pay approximately $7 million in penalty interest per day if the deal fails to close by September 30.
Led by California, 12 states filed a lawsuit on July 13, arguing the merger would limit competition in Hollywood and reduce consumer choice. A Paramount spokesperson said, “We look forward to proving our case.”
New York Attorney General Letitia James said, “Stopping this merger while our lawsuit proceeds is a critical victory in our effort to uphold the law and defend the film and television industries.”
The companies agreed to suspend the deal until five days after the judge's ruling on the merits of the case, or until June 1, 2027, whichever comes first. If the delay lasts until 2027, Paramount could end up paying Warner Bros shareholders up to $1.7 billion in total penalty interest.
According to analysis by Reuters, it takes an average of eight months for a judge to rule in similar merger lawsuits.
The development came just days after U.S. District Judge Araceli Martinez-Olguin issued a temporary order halting the transaction at the request of the states.
There are also concerns that the merger could lead to excessive media control. With Warner Bros-owned CNN coming under the Paramount umbrella, the company—which already owns CBS—would further consolidate its power in the industry. Under CEO David Ellison, CBS has been accused of biased coverage in favor of U.S. President Donald Trump. Ellison’s father, tech billionaire Larry Ellison, is known to be a Trump ally.
