Paramount has agreed to pause its acquisition of Warner Bros. Discovery until at least June 1, 2027, as two separate lawsuits challenging the $111 billion deal move through federal court.
According to NPR, Paramount filed the agreement in federal court in California on Friday, stating it will not take any steps to acquire Warner until June 1, 2027, or five days after the lawsuits are resolved, whichever comes first. U.S. District Judge Araceli Martínez-Olguín had already granted a temporary restraining order earlier in the week to pause the acquisition. The judge had not yet signed the agreement as of Friday.
The proposed deal would combine Paramount and Warner's film studios, the Paramount+ and HBO streaming services, dozens of cable channels, and major news organizations including CBS and CNN.
A consortium of 12 state attorneys general and the Writers Guild of America filed the lawsuits alleging the merger would reduce competition and harm filmgoers, TV viewers, news consumers and entertainment workers. New York Attorney General Leticia James wrote in a statement, "Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries."
California Attorney General Rob Bonta framed the case more broadly. "Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse," Bonta said.
Paramount, for its part, said it welcomes the path to trial. "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," the company said in a statement. "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."
The delay carries steep financial consequences. Starting October 1, Paramount must pay Warner shareholders roughly $650 million for every 90 days the deal is set back. If the deal is not closed by June 4, 2027, Paramount would owe Warner $7 billion under the terms Warner shareholders already approved. A Paramount spokesperson confirmed those fees are not affected by the latest agreement.
The deal has also drawn scrutiny over the relationship between Paramount's controlling family and President Trump, given that two major newsrooms would fall under that family's control if the merger proceeds.
