Paramount delays $110bn WBD deal to 2027, adding $1.7bn in fees
A legal challenge from state attorneys general has forced Paramount to delay its $110 billion acquisition of Warner Bros. Discovery until 2027, exposing the company to hundreds of millions in quarterly ticking fees and a massive breakup risk.
Paramount Skydance has agreed to push back the completion of its $110 billion acquisition of Warner Bros. Discovery to as late as June 1, 2027. The timeline extension follows a temporary restraining order issued by a judge on Monday in response to an antitrust lawsuit filed by a coalition of state attorneys general.
For investors, the delay carries a steep and compounding financial penalty. Paramount must now pay a ticking fee of 25 cents per share each quarter starting September 30, a liability totaling roughly $650 million in cash every quarter. If the delay stretches to the 2027 deadline, the overall deal price will increase by approximately $1.7 billion.
The escalating costs underscore the high-stakes nature of the legal conflict. Should the states ultimately succeed and the transaction collapse entirely, Paramount is liable for a $7 billion breakup fee.
The state-level blockade stands in stark contrast to the regulatory consensus elsewhere. The U.S. Department of Justice's antitrust division cleared the merger in June, and European regulators followed suit with their approval earlier this week. Paramount emphasized that "dozens of competition authorities around the world have already reached" the conclusion that the deal benefits competition.
Paramount characterized the Friday agreement as a "significant win" that secures "a direct path to a trial based on the evidence." The company asserted that the plaintiffs' "market definitions bear no relationship to the realities of today's marketplace and cannot withstand scrutiny." Bonta countered that corporate concentration "makes things more expensive, and it makes things worse."
The original February agreement saw David Ellison's Paramount outbid Netflix to combine two major Hollywood studios, prominent streaming platforms, and extensive broadcast networks. State officials have argued the tie-up would reduce competition and trigger significant job losses across the film industry. Paramount had repeatedly targeted a September closing before the litigation effectively forced a pause.
