Paramount agrees to pause merger with WBD for nearly a year
Paramount agrees to pause merger with WBD for nearly a year
Paramount has opted not to close its deal to purchase WBD until June 1, or until lawsuits challenging the deal are resolved.
The Paramount merger with Warner Bros. Discovery is probably going to get quite a bit more expensive for the company — if it happens at all. Paramount Skydance has now pledged not to proceed with the merger for months, or until it can successfully fend off separate legal challenges brought by 12 state attorneys general and by the Writers Guild of America.
Key Details:
- We’ll wait: Paramount has opted not to move forward with its merger with WBD until June 2027.
- Mixed message: Both Paramount and the groups suing to stop the merger called the decision a victory.
- Tick tock: WBD investors are owed a $0.25-per-share ticking fee for every quarter the deal doesn’t close after September..
Paramount has voluntarily opted not to go ahead with its merger with Warner Bros. Discovery until June 1, 2027, or until separate lawsuits brought to stop the merger are resolved. The first is a case brought forth by 12 state attorneys general, and the other a suit filed by the Writers Guild of America.
The decision by Paramount to pause its merger came after the judge presiding over the states’ case opted to extend an ordered pause of the merger from seven to 14 days while the two sides worked out a procedural schedule. Judge Araceli Martínez-Olguín originally paused the merger on the grounds that the states could reasonably prove the transaction would violate antitrust laws.
Paramount is trying to claim its decision to pause the merger as a “significant win,” as moving back the closing date could speed up the legal process by pushing the case to trial sooner. But the states are also claiming victory after the decision; California’s AG Rob Bonta said the delay was “great news for audiences.
Now that the deal is officially not closing until next June, Paramount faces the prospect of paying a large ticking fee to WBD shareholders. The company has pledged to pay an approximate $650 million per quarter to shareholders if closing is delayed past Sept. 30, 2026, and if the deal falls through entirely, WBD would also get a $7 billion breakup fee.
If combined, Paramount and WBD would carry a debt load of around $80 billion, which could leave Paramount CEO David Ellison feeling damned if he does, and damned if he doesn’t. Paramount originally expressed a great deal of confidence that it could close the mega-deal, but things are looking less sure for the company as it scrambles to save itself.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr., and more. Get free access with a Walmart+ subscription.
Paramount+ includes “1883,” “Tulsa King,” “Star Trek: Discovery,” “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa League, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.