No happy ending before 2027: Court delays Paramount's Warner acquisition
Paramount actually wanted to have closed the Warner deal a long time ago. Now it's clear: nothing will happen before March 2027. Twelve US states are forcing a trial – and Paramount is paying for every delay.
Just a moment ago, everything seemed to be going well: The US Department of Justice had given the green light for Paramount's acquisition of Warner Bros., and the EU even followed suit – with conditions, including Paramount having to exit a film distribution joint venture with Universal in Europe.
The completion of the acquisition seemed only a matter of weeks away.
Well.
Twelve States Say No
Instead of weeks, it will now take months. On July 13, a group of twelve states, led by California Attorney General Rob Bonta, filed a lawsuit. The accusation: The merger would significantly weaken competition in cinema films, blockbusters, and cable TV licenses and, according to authorities, would lead to higher prices, poorer quality, and less content for film and television. A day later, the Writers Guild of America (WGA) followed with its own lawsuit. Their argument: The merger unlawfully restricts competition for writers.
A judge in the federal court in Oakland, Araceli Martínez-Olguín, reacted promptly: She issued a two-week injunction that temporarily halted the deal. The reasoning: Serious questions about the matter remained open, which would argue for a preliminary injunction. Paramount itself had also admitted that it would not suffer any damage from the delay until the end of September, the judge continued.
The Deal is Put on Hold – Voluntarily
Instead of fighting, Paramount relented: On July 24, an agreement was reached with the plaintiffs to put the deal on hold until a judgment or until June 1, 2027, at the latest – whichever comes first. Until then, Paramount may not directly or indirectly integrate or merge the businesses of Warner Bros. Discovery.
Paramount CEO David Ellison tried to salvage the mood in an internal memo: Without the lawsuits, the deal would have been completed long ago, but he remained convinced that the acquisition was legally sound. A spokesperson for the California Attorney General's Office dismissed this, calling the case a clear violation of federal antitrust law.
And Now: March 2027
How long "on hold" would last was long uncertain. Paramount wanted a trial to begin in November, while the states and the WGA demanded April 2027 to have more time for evidence gathering. Since last night, the result is clear: Judge Martínez-Olguín has scheduled the trial for March 2 to 19, 2027, spread over twelve days of hearings. A clear victory for the opposition – and another setback for Paramount, which had actually wanted to finalize the deal this summer.
For Paramount, things are now getting even tougher: Time is literally money in this deal. From October 1, Paramount must pay a "Ticking Fee" of $0.25 per share per quarter to Warner shareholders if the deal is not closed by then – which amounts to approximately $650 million per quarter. If the acquisition ultimately fails entirely for regulatory reasons, it will be really expensive: Paramount will then owe Warner a contractual penalty of $7 billion. The agreement itself expires in June 2027.
Incidentally: The CNN Question
Also noteworthy is this: David Ellison reportedly recently claimed that the real point of contention behind the lawsuits was not antitrust law at all, but his future control over CNN – coupled with the promise that he would not interfere with the editorial teams. The California Attorney General's Office refutes this and insists that it is a simple antitrust case.
This statement is noteworthy because it addresses a question that has accompanied this acquisition from the beginning: Warner also owns CNN, one of the loudest Trump-critical news channels in the USA. And behind Paramount is the Ellison family, a financier closely associated with the Trump administration. If CNN thus falls under this umbrella, critics fear that the channel could be softer on the president in the future – whether through open pressure or simply through anticipatory restraint in the editorial office.
Precisely this connection can also be read as an explanation for why the US Department of Justice approved the acquisition in the summer without any conditions, while the EU at least demanded a partial sale. Such an uncomplicated antitrust clearance for an $111 billion deal that merges two of the largest remaining Hollywood studios is… generous. Whether political goodwill is actually behind it or simply a different antitrust assessment than in Europe cannot be proven from the outside.
Whatever the true reason for the lawsuits: The Attorneys General are officially operating exclusively on antitrust grounds. But the fact that control over one of the most well-known Trump-critical channels in the USA is part of the deal is something that hardly anyone in this politically charged situation will be able to completely ignore – neither the plaintiffs nor Paramount itself.
I write about technology as if it were cinema, and about films as if they were real life. Between bits and blockbusters, I’m after stories that move people, not just generate clicks. And yes – sometimes I listen to film scores louder than I probably should.
From the latest iPhone to the return of 80s fashion. The editorial team will help you make sense of it all.
Show all