Paramount agrees any Warner Bros. Discovery merger won’t close before 2027

Right, here we go again. The seemingly never-ending drama surrounding the Paramount and Warner Bros. Discovery merger just got another twist, and if you were hoping for tidy closure any time soon, you’re out of luck. Even though all the usual regulatory hurdles were cleared (both in the US and across the pond), a crowd of lawsuits has thrown a hefty spanner in the works. Paramount’s now had to promise it won’t go anywhere near finalising the deal before 1 June 2027—at least not unless these lawsuits vanish first.

Paramount is already set to pay $110 billion for Warner Bros., but it could wind up costing even more the longer this legal battle drags out.

The legal logjam

Bit of context on how we got here: earlier this week, Judge Araceli Martinez-Olguin kicked things off with a temporary restraining order, halting the merger for 14 days. She’s since extended that to 17 August. Both Paramount and Warner want a trial scheduled, but that’s still waiting on the judge’s signature—so yes, more waiting.

The official spin machines are working overtime, obviously. Paramount put out a statement saying this delay is basically a win because it fast-tracks them right to a trial, where they reckon they’ll squash the competition concerns for good.

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. This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached. Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.

On the other side you’ve got New York Attorney General Letitia James, who’s one of an entire football squad of AGs trying to block the merger. She argues the deal is bad news for just about everyone—cinema workers, families dropping a tenner on popcorn at the box office, and basically anyone who enjoys having more than three companies running Hollywood.

If you care about film industry drama, here’s what’s wild: Paramount is on the hook for a $110 billion purchase price, but the longer this scrapes along the courts, the higher the bill climbs. Paramount has agreed to a $7 million per day ‘ticking fee’—so, for every day after 30 September without a deal, Warner pulls in an extra seven million just for waiting. Drag this out another year, and you do the maths. Oh, and if it all collapses, Paramount is staring down a $7 billion breakup fee for their trouble.

Hollywood says 'no thanks'

Now, here’s where the whole thing goes a bit old-school: a pile of Hollywood’s biggest names are not staying quiet. Directors, actors, writers—basically the full breakfast buffet—have signed an open letter posted at Blockthemerger.com. They say the deal is a ‘bad one’ for anyone not already running a multi-billion-dollar media empire, slamming it for threatening the industry’s diversity and independence. They’re also not wrong: anyone who’s been tracking the streaming world knows mergers have a knack for making things blander, not better.

Just a sample from the statement?

We are deeply concerned by indications of support for this merger that prioritize the interests of a small group of powerful stakeholders over the broader public good. The integrity, independence, and diversity of our industry would be grievously compromised. […] Competition is essential for a healthy economy and a healthy democracy. So is thoughtful regulation and enforcement. Media consolidation has already weakened one of America’s most vital global industries—one that has long shaped culture and connected people around the world.

Before you dismiss this as typical Hollywood hand-wringing, have a look at the signatories: JJ Abrams, Damon Lindelof, David Fincher, Denis Villeneuve, Adam McKay, Ben Stiller, Bryan Cranston, Catherine Keener, David Chase, Emma Thompson, Don Cheadle, James Schamus, Jane Fonda, Jason Bateman, Lin-Manuel Miranda, Noah Wyle, Tiffany Haddish, Mark Duplass, Joaquin Phoenix, Lily Gladstone, and a good many more. There’s a decent argument that if you’ve seen something on telly this past decade, someone on that list had a hand in it.

So, the stakes are sky-high, the legal bills are climbing, and practically everyone except the execs seems to be hoping the brakes stay slammed on.