Paramount Skydance and WBD agree to delay $111 billion merger pending antitrust trial
A dozen states and the Writers Guild of America secured a months-long halt to the transaction, bypassing preliminary injunction proceedings in favour of a full trial on the merits.
Paramount Skydance and Warner Bros. Discovery (WBD) have agreed to a stipulation delaying their $111 billion merger until after a federal judge rules on the merits of an antitrust lawsuit, or until 1 June 2027, whichever occurs first. The agreement, filed in the US District Court for the Northern District of California, follows a temporary restraining order granted by Judge Araceli Martínez-Olguín, who found the deal likely to violate antitrust laws by reducing competition in the film and television industries. The delay was also supported by the Writers Guild of America, which filed a separate lawsuit to block the transaction.
The stipulation prevents the companies from combining or integrating operations until five days after the merits determination or 1 June 2027, whichever is earlier. If no merits determination is reached by the June deadline, the plaintiffs retain the right to seek a preliminary injunction to maintain the block. New York Attorney General Letitia James described the halt as a "critical victory" for upholding the law and protecting the film and television industries, while California Attorney General Rob Bonta stated the group was eager to continue making their case to ensure the "unlawful merger never sees the light of day."
The challenge is led by a coalition of a dozen states, including California and New York, alongside the Writers Guild of America. The states argue the merger will eliminate competition by combining two of the five major Hollywood movie studios and two of the five major owners of basic cable TV channels. The agreement allows the parties to skip the preliminary-injunction phase of district court litigation, avoiding briefs and hearings on whether the merger should be delayed during litigation. Either side retains the right to appeal an adverse ruling to the US Court of Appeals for the 9th Circuit after a decision on the merits.
Paramount Skydance stated the result provides a "direct path to a trial" and claimed it proves the transaction is good for competition, consumers, and creators. The company argued this is the "fastest and clearest way to prove" the deal's benefits, a conclusion it claims dozens of competition authorities around the world have already reached. However, media advocacy group Free Press characterised the agreement as a win for plaintiffs, suggesting Paramount is "pretending" to welcome the trial and is merely resigning itself to waiting for a full antitrust trial in federal court.
The merger was previously greenlit by the Trump administration, a move that reportedly surprised US Department of Justice staff lawyers who were leaning toward recommending a lawsuit to block it. Judge Martínez-Olguín previously found the deal likely to reduce competition substantially and violate antitrust laws, granting a temporary restraining order that was extended for two weeks. The agreement marks a significant shift from the initial temporary freeze, moving the case directly toward a substantive assessment of the antitrust arguments.
