Paramount agrees to delay Warner Bros. merger into 2027

Paramount Skydance has agreed to pause its merger with Warner Bros. Discovery until June 2027, while a judge considers a recently filed joint lawsuit from 12 states to block the deal, The New York Times reports. The new agreement extends the two week pause Judge Araceli Martínez-Olguín already granted the states on July 20, though it won't be official until the judge approves it.

As part of this agreement, Paramount "will not take any steps, directly or indirectly, to integrate or consolidate their operations" until June 1, 2027, or five days after the court decides whether the Warner Bros. acquisition violates antitrust law. A previously scheduled hearing on August 3 is also canceled, and the states and both branches of the Writers Guild of America — who filed a separate lawsuit on July 14 — have withdrawn requests for injunctions. All three parties will now be expected to propose new trial schedules for their separate cases by July 31.

Paramount beat out Netflix to purchase Warner Bros. Discovery in February, valuing the historic studio at around $111 billion, or $31 per share. The company has so far faced few obstacles to completing its merger. The US Department of Justice approved the deal in June, and the European Commission gave its conditional approval — contingent on Paramount exiting a European distribution deal with Universal — earlier this week.

Opposition from states and one of Hollywood's biggest unions have been the only sticking points, and now they could prove to be a larger annoyance than Paramount expected. Delaying the deal past the end of September will cost Paramount $0.25 per share per quarter, or around $7 million per day, but the company claims heading to a trial works in its favor. "This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators," the company tells The New York Times.