The $111 billion Hollywood merger faces a delay after 12 US states and the Writers Guild of America raised concerns over competition and market control.
Paramount Global has agreed to postpone its proposed merger with Warner Bros. Discovery (WBD) as legal challenges against the major entertainment deal continue in US courts.
According to court filings submitted on Friday, the merger will not be completed until at least five days after the ongoing legal proceedings are resolved, or until June 1, 2027, whichever comes first.
The delay follows a temporary court order secured by a group of states led by California. The order blocked the merger for 28 days as officials argued the deal could reduce competition in the television and film industries.
The legal challenge involves 12 US states along with the Writers Guild of America, who have raised concerns that the merger could give fewer companies greater control over Hollywood’s production and distribution markets.
A scheduled court hearing on August 3 has now been canceled. Meanwhile, the Writers Guild of America has withdrawn its request for a preliminary injunction, though it can submit a new request in the future if necessary.
The delay could also create significant financial pressure for Paramount. If the merger is completed after September 30, the company may have to pay Warner Bros. Discovery shareholders a daily “ticking fee” of nearly $7 million.
If the agreement collapses completely, Paramount could face a $7 billion breakup fee payable to WBD.
California Attorney General Rob Bonta welcomed the court development, saying the state’s position is focused on protecting competition and consumers.
“When too few companies control important markets, prices go up and competition suffers,” Bonta said.
The merger has already received approval from the US Department of Justice. The European Commission has also approved the agreement with conditions, including Paramount ending its United International Pictures distribution partnership with Universal Pictures.
The future of one of Hollywood’s biggest proposed mergers now depends on the outcome of the ongoing legal battle, which could reshape the entertainment industry’s competitive landscape.