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David Ellison’s Paramount Skydance agreed to freeze its $110bn merger with Warner Bros Discovery until as late as next June as a dozen US states seek to block one of the largest Hollywood deals in history on antitrust grounds.
Last week, a coalition of Democratic state attorneys-general led by California’s Rob Bonta sued to block Paramount’s acquisition of WBD, arguing it would weaken competition for blockbuster movie producers, distributors and cable television groups.
A federal judge on Monday temporarily paused the deal for two weeks while she weighed the legal challenge.
But after meeting on Thursday and Friday, the two sides agreed to halt the deal until the merits of the legal challenge are resolved or else on June 1 2027, according to a court filing.
A Paramount spokesperson said the agreement was a “significant win” because it was “a direct path to a trial based on the evidence”.
“We look forward to proving our case at trial,” the spokesperson said.
Paramount shares fell as much as 4 per cent on the news on Friday.
The stand-off has left the fate of some of the most recognisable entertainment properties hanging in the balance. A Paramount-WBD combination would be one of the biggest media mergers in history — uniting two of Hollywood’s big film studios, as well as news networks CBS and CNN, and the streaming services HBO Max and Paramount Plus.
“Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” said New York state attorney-general Letitia James.
The delay will be costly if it drags on.
After the end of September, Paramount has promised to pay WBD shareholders a “ticking fee” of about $650mn each quarter until the transaction closes.
The legal battle puts Democratic states at odds with the Donald Trump administration, whose Department of Justice quickly approved the merger last month.
Trump has described the billionaire Ellison family as friends. Paramount chief executive David Ellison’s father is Oracle co-founder and Trump ally Larry Ellison.
Critics of the deal have warned that Paramount’s takeover would pull CNN rightward politically.
Forrester analyst Mike Proulx said the ultimate fate of the merger “just got longer, messier and likely more expensive”.
“I’m not sure how Paramount can frame this as a win when the deal just became more uncertain than it was 24 hours ago.”
The new timeline “materially reduces the near-term concern that a politicised Paramount would control CNN during the 2026 midterms”, he added.
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