Paramount Skydance has agreed to pause its mega-merger with Warner Bros. Discovery until five days after the antitrust cases are ruled on, or until June 1, 2027, whichever comes sooner, the company said on Friday.
Paramount is facing an antitrust lawsuit from 12 US states and a legal challenge from the Writers Guild of America.
This decision means Paramount will almost certainly head to court to defend its deal to acquire WBD, unless settlements are reached. That will likely mean a delay of months.
David Ellison’s media company had been hoping to close its WBD deal by mid-July.
“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,” a Paramount spokesperson said in a statement.
Paramount’s WBD deal has received approval from the US Department of Justice, the European Union, and other global regulators.
The states suing to stop Paramount’s WBD acquisition said the deal raised antitrust concerns in three markets: wide-release film distribution, big-budget movie distribution, and cable network licensing.
With WBD, Paramount would control two top film studios in Paramount Pictures and Warner Bros. Studios; TV networks like HBO, CBS, and CNN; and streaming services Paramount+, Pluto TV, and HBO Max.
Paramount’s spokesperson said these concerns about concentration “bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny,” adding that the company would “look forward to proving our case at trial.”
Shares of Paramount and WBD each fell sharply on the news. Paramount’s stock finished the day down 3.3% while WBD shares slid about 0.7%.
Paramount employees are torn about the WBD deal
Staffers at Ellison’s company have been on edge about the WBD deal and antitrust challenges.
Some told Business Insider they believed the deal would improve their job security as Paramount grew stronger, while others thought the merger would lead to overlap that could put their roles at risk.
“I’m definitely worried about impending layoffs post-merger,” one Paramount worker said. “But I’m worried about the company as a whole if it doesn’t go through.”
A pro-deal Paramount streaming employee said they “see Paramount in the same light as Spirit Airlines. Regulators didn’t let JetBlue and Spirit Airlines merge. Now Spirit is bankrupt, and JetBlue is struggling.”
A streaming staffer who didn’t like the deal said they were “tired of mergers and chaos.”
This story is developing. Check back for updates.