In a legal filing, Paramount and state attorneys general have reached an agreement to delay the acquisition of Warner Bros. Discovery to June 2027 or earlier if it makes it way through courts and a ruling is made before. The agreement needs to be approved by Judge Araceli Martínez-Olguín, who is overseeing the case.

On July 13, a dozen attorneys general filed a lawsuit to stop the acquisition of Warner Bros. Discovery by Paramount Skydance. The lawsuit raised antitrust concerns and a decrease of competition. On July 20, a temporary restraining order was granted that prevented the deal from “closing” or “consummating” or taking any steps that would integrate or consolidate the operations. That temporary restraining order was extended an additional two weeks before today’s deal.

The delay throws the entire deal into chaos as it potentially increases the cost to Paramount. For each quarter the deal doesn’t close beginning in October 2026 the cost increases $650 million. If the decision really stretches out until June 2027, that’d increase the cost nearly $2 billion. Paramount has stated that it might have to rework its financing if the price increases and with the volatility in the Ellison’s net-worth due to Oracle stock prices, the deal’s financial situation became far more complicated.

Paramount described the delay as a “significant win” as it will give the company “a direct path to a trial based on the evidence,” a spokeswoman said. “This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators.”

Below is California Attorney General Rob Bonta’s press release regarding the deal:

California Attorney General Rob Bonta today announced securing an agreement with Warner Bros. and Paramount that would keep the entertainment titans from merging until June 1, 2027, or until after a decision by the court on the states’ claims, whichever comes first. If the court finds in favor of the states, the merger would be blocked pending appeal. Last week, Attorney General Bonta led a coalition of 12 attorneys general in filing a lawsuit challenging the unlawful merger, and this week, he celebrated a critical win when he secured a temporary restraining order pausing the merger. The Warner Bros./ Paramount merger is expected to result in higher prices, lower content quality, and fewer movies and TV shows. The proposed $110 billion merger — the largest in Hollywood history — would combine two of Hollywood’s five major film distributors and two of the five major owners of basic cable channels, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors, and ultimately, audiences nationwide. 

“Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse,” said Attorney General Bonta. “Today’s agreement is great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy. We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day.”

As part of today’s deal, Warner Bros./Paramount agree not to merge until 5 days after a decision on the merits of the states’ challenge or until June 1, 2027, whichever comes earlier. If the court finds in favor of the states, the merger would be blocked pending appeal. If there is no merits determination by June 1, 2027, the states can file a motion for a preliminary injunction.

For more than a century, Warner Bros. and Paramount have stood astride the film and television industry as independent sources of creativity and competition. The lawsuit alleges that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. The attorneys general allege that, if Warner Bros. and Paramount are allowed to merge, it would lessen competition in three markets: film distribution, anticipated blockbuster film distribution, and licensing cable TV channels.

And the release from the office of Attorney General Letitia James:

Attorney General Letitia James and a coalition of 11 other attorneys general today secured a months-long halt to Paramount Skydance Corp.’s (Paramount) $110 billion takeover of Warner Bros. Discovery, Inc. (Warner Bros.). On July 13, Attorney General James and the coalition sued Paramount and Warner Bros., alleging that their merger would illegally reduce competition throughout the film and television industries, harming workers, consumers, and businesses. Attorney General James and the coalition today secured a stipulation from Paramount and Warner Bros. that will delay the merger until after a court ruling on the merits of the lawsuit or June 1, 2027, whichever is earlier.

“From the workers and artists who bring stories to life to the families who buy tickets at the box office, Paramount’s illegal takeover of Warner Bros. is a bad deal for all those who count on a competitive entertainment industry,” said Attorney General James. “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. I look forward to continuing our case to stop this illegal merger.”

On July 20, Attorney General James and the coalition won a temporary restraining order preventing Paramount and Warner Bros. from carrying out their merger. Under the stipulation announced today, Paramount and Warner Bros. will continue to remain separate companies until five days after the court’s decision on the merits of the case or June 1, 2027, whichever comes earlier.

Joining Attorney General James in this case are the attorneys general of Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon, and Washington.

For New York, this matter is being handled by Assistant Attorneys General Pratik Agarwal, Morgan Feder, and Will Margrabe and Attorney General Fellow Jaya Mantovani, all of the Antitrust Bureau, under the supervision of Bureau Chief Elinor Hoffmann and Deputy Bureau Chief Amy McFarlane, and with the assistance of Chief Economist Chitra Marti. The Antitrust Bureau is part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Christopher D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.

On July 13, a dozen attorneys general filed a lawsuit to stop the acquisition of Warner Bros. Discovery by Paramount Skydance. The lawsuit raised antitrust concerns and a decrease of competition. On July 20, a temporary restraining order was granted that prevented the deal from “closing” or “consummating” or taking any steps that would integrate or consolidate the operations.

Now, the judge has extended that restraining order by an additional 14 days, through August 17. The reason is to give the parties in the case more time to set an extended schedule for legal proceedings.

A hearing is currently set for August 3 to address the motion by the states and a preliminary injunction that could outright block the deal.

Paramount, though, has filed a motion for a three-day evidentiary hearing to take place later in August instead of that August 3 motion. They want that format so they can cross-examine the states’ expert witnesses. The states have said it’s an attempt to get around the process and decrease the time for the states to prepare their argument before the court.