The Paramount WBD merger delay now runs well beyond the short-term restraining order that first stopped the $111 billion deal. Paramount Skydance, Warner Bros. Discovery, a coalition of 12 states and the Writers Guild of America agreed in a court filing that the companies will not close the transaction or combine operations until five days after a ruling on the merits, or June 1, 2027, whichever comes first.
The stipulation keeps the companies separate while the antitrust challenge moves toward a fuller trial record. If U.S. District Judge Araceli Martínez-Olguín has not issued a merits decision by June 1, 2027, the plaintiffs can ask for a preliminary injunction to keep the deal blocked.
New York Attorney General Letitia James’ office described the agreement as a months-long halt to the transaction. James said stopping the merger while the case proceeds is a victory for efforts to enforce the law and protect film and television markets.
Paramount cast the same deal differently. In a statement reported by CNBC, the company said the agreement gives it a direct route to a trial on the evidence and said it plans to show the acquisition is good for competition, consumers and creators. Paramount also said competition authorities in multiple countries have already reached that conclusion.
Why is the Paramount WBD merger delayed?
The states say the acquisition would reduce competition by putting two of the five major Hollywood film studios under one owner, along with two of the five major owners of basic cable TV channels. California Attorney General Rob Bonta said the states will keep arguing that the merger is unlawful and should not proceed.
Judge Martínez-Olguín, who sits in the U.S. District Court for the Northern District of California, had already granted a temporary restraining order against the deal. In that order, she found the states had shown the transaction was likely to substantially lessen competition and violate antitrust law.
The case followed federal approval of the merger by the Trump administration. The approval reportedly surprised some U.S. Department of Justice staff lawyers who had worked on the investigation and were leaning toward recommending a lawsuit to block the transaction.
What happens next in court?
The agreement lets the parties skip the preliminary-injunction fight that was about to dominate the next phase of the case. A preliminary injunction is a court order that can keep a deal frozen during litigation when plaintiffs persuade a judge they are likely to win on the merits.
The temporary restraining order had been set to last 14 days, and the judge extended it for another two weeks while preparing for preliminary-injunction proceedings. With the new agreement, the parties no longer need to brief or argue whether the merger should remain blocked during that interim phase.
The Writers Guild of America said Paramount and Warner Bros. Discovery agreed to the pause sought by both the state attorneys general and the union: no merger until the cases are resolved or until June 1, 2027, whichever comes first.
Paramount could have tried to challenge a preliminary injunction at the U.S. Court of Appeals for the 9th Circuit. The new schedule does not remove appellate review entirely. Either side can still appeal after Martínez-Olguín issues a merits decision.
Free Press, a media advocacy group, called the agreement a win for the plaintiffs. Craig Aaron, the group’s co-CEO, said Paramount had chosen to wait for a federal antitrust trial rather than risk losing an injunction fight now, and argued the evidence will show the deal should be blocked.
This story draws on original reporting from Ars Technica.
