Paramount has agreed to delay closing its proposed merger with Warner Bros. Discovery while a sweeping antitrust lawsuit brought by a coalition of 12 state attorneys general works its way through federal court, adding another twist to what would become the largest merger in Hollywood history.
The agreement, filed Friday in U.S. District Court, pauses the transaction until five days after the court resolves the states’ request for a preliminary injunction or until the merger agreement expires in June 2027, whichever comes first. The move follows a temporary restraining order issued earlier this week by U.S. District Judge Araceli Martínez-Olguín in California.
The lawsuit, led by California Attorney General Rob Bonta and joined by 11 other states, argues the merger would substantially reduce competition across several key entertainment markets, including theatrical film distribution and cable television licensing. The states contend combining Paramount and Warner Bros. Discovery would leave consumers with fewer choices while reducing opportunities for creators and exhibitors.
Paramount continues to dispute those claims.
In a court filing, the company characterized the delay as a procedural step that provides a clear path toward a trial on the merits rather than an extended preliminary injunction fight. Paramount maintains the merger is lawful and has pointed to the U.S. Department of Justice’s decision last month to close its own investigation without challenging the deal.
The agreement effectively cancels a planned preliminary injunction hearing and shifts the focus toward a full antitrust trial, though no trial date has yet been set. The parties have been ordered to submit a proposed litigation schedule by July 31.
The delay could prove costly.
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Under the merger agreement, Paramount faces significant financial obligations if the transaction remains uncompleted beyond certain deadlines, with analysts warning that prolonged litigation could add hundreds of millions of dollars in additional costs while extending uncertainty for employees, filmmakers and investors.
The legal challenge comes despite federal regulators previously concluding the merger was unlikely to substantially lessen competition. The Justice Department said in June that, following an eight-month investigation, it found insufficient evidence that combining Paramount and Warner Bros. Discovery would harm consumers in streaming, linear television or theatrical film distribution.
If ultimately approved, the merger would unite two of Hollywood’s largest film studios along with streaming services Paramount+ and HBO Max, major television networks including CBS and CNN, and an extensive portfolio of cable brands under a single corporate umbrella. Opponents argue that level of consolidation would fundamentally reshape the entertainment landscape.
The state attorneys general have called the pause an early victory for consumers, movie theaters and creative workers, while Paramount insists the delay will ultimately allow the company to fully defend the transaction in court.
