Paramount delays closing Warner buyout while judge considers states’ challenge

NEW YORK (AP) — Paramount and Warner Bros. Discovery have agreed to delay closing their $81 billion merger well into next year, a stunning move that arrives as a judge continues to consider a challenge from 12 states seeking to block the deal altogether.

Paramount said in a filing Friday that it won’t close its Warner buyout until either a court ruling is made on the states’ claims or June 1, 2027. The agreement comes just days after U.S. District Judge Araceli Martínez-Olguín granted a temporary restraining order to freeze the transaction for weeks, noting that the states had raised some “serious questions” and made a strong case about the merger’s potential to “substantially lessen competition.”

Paramount and the states have also agreed to cancel a preliminary injunction hearing that was set for August 3. The states’ case in now headed down the path toward a larger antitrust trial.

Both sides touted the delay as a victory.

The result was “exactly what we have sought from the outset: a direct path to a trial based on the evidence,” Paramount said in a statement. The company, which was bought by Skydance just last year, added that it looked forward to proving its transaction is “good for competition, good for consumers, and good for creators.”

Meanwhile, California Attorney General Rob Bonta — who is leading the states’ case — called the delay great news for audiences, movie theaters and entertainment and media workers nationwide.

“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 in a statement. He added that the states were eager to see their challenge through court and ensure the Paramount-Warner combo “never sees the light of day.”

The Writers Guild of America has also filed a lawsuit seeking to block the merger, arguing that the deal would cause specific harm to movie and TV writers. The delay will give more time for that case to make its way through court, too.