Paramount Skydance has reached a significant agreement with a coalition of state attorneys general, effectively postponing the merger with Warner Bros. Discovery until after an antitrust trial. This joint stipulation was entered in federal court on Friday afternoon.
Details of the Agreement
The agreement stipulates that the $111 billion merger will not close until five days after a trial or by June 1, 2027, whichever comes first. This decision follows a temporary restraining order obtained by a coalition of 12 states, led by California, aimed at blocking the merger for 28 days while a motion for a preliminary injunction is considered.
Concerns Over Competition
The states allege that the merger poses a threat to competition within the cable and theatrical markets and should be obstructed. Paramount initially sought a quick three-day hearing in late August concerning the injunction motion; however, the states argued they needed more time for discovery and preparation for a full trial.
Negotiations and Trial Preparations
While the coalition was due to file their injunction motion on Thursday night, they chose to delay as both parties engaged in discussions for a mutual path forward. Paramount characterized the resulting agreement as a “significant win.” In a statement, a spokesperson remarked, “Today’s agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence.” They emphasized that this approach is the fastest way to demonstrate the transaction’s benefits for competition, consumers, and creators, a view already supported by numerous competition authorities globally.
Court Proceedings and Other Motions
A hearing was set for August 3 in federal court in Oakland, where both sides were expected to present arguments regarding the injunction motion. However, the cancellation of that hearing was mutually agreed upon. Additionally, the Writers Guild of America had filed a separate motion for an injunction that was also scheduled for the same date but has since been withdrawn, indicating that Paramount will not proceed with the merger until the antitrust claims are resolved.
