Paramount Skydance Chief Executive David Ellison is pushing forward with plans to finalize a massive acquisition of Warner Bros. Discovery despite mounting legal challenges, according to the Los Angeles Times. Paramount agreed to delay the proposed merger to contest an antitrust lawsuit led by California Attorney General Rob Bonta and 11 other state attorneys general.
Paramount Defends Merger Amid Antitrust Trial Delay
The agreement to postpone the closing pushed the timeline as the legal battle heads toward a trial expected to take place in 2027. Ellison told employees in a memo that he remains confident in the transaction.
Let me be clear: we remain highly confident that this transaction does not pose any legal issues, and we will complete it and bring these two companies together,
Ellison wrote in the memo.
Ellison spent nearly a year securing the bid past the U.S. Department of Justice and global regulatory bodies. However, the state-level legal opposition prompted a war-room mentality among executives. To manage the delayed timeline, Paramount agreed to pay $650 million per quarter in ticking fees—amounting to roughly $7 million a day—if the transaction is not completed by September 30.
Legal Opposition and Regulatory Defense
The antitrust lawsuit was filed by latimes.com alongside attorneys general from Oregon, Washington, Colorado, Nevada, New Mexico, New Jersey, and New York, among others. The states argue that the combination violates the Clayton Antitrust Act across three specific markets: wide-release theatrical films, potential blockbuster movies, and cable television channel concentration.
U.S. District Judge Araceli Martínez-Olguín noted that the plaintiff states presented compelling evidence that the deal may violate U.S. antitrust law. In response, Paramount defended its position by highlighting that the U.S. Department of Justice previously found the acquisition would not harm competition. The company also secured regulatory clearances from 65 jurisdictions, including Australia, China, the European Commission, Germany, France, Spain, and Canada.
Labor organizations have also mobilized around the legal challenge. The Writers Guild of America sued earlier in the month, and SAG-AFTRA announced its support for the state attorneys general.
Our members have every right to expect that the government will do thorough regulatory oversight when a deal of this magnitude takes place,
said SAG-AFTRA President Sean Astin in a statement. Teamsters have also spoken out against the deal.
Shareholder Lawsuits and Governance Concerns
In addition to the antitrust litigation, Paramount faces shareholder pressure. Investors filed a lawsuit in Delaware Chancery Court accusing David Ellison and his father, Larry Ellison, of breaching fiduciary duties. The investor complaint alleges that the leadership struck an agreement involving CNN changes and advertising commitments to secure approval.
Paramount stock has dropped about 20 percent since the beginning of July amid concerns over elevated costs required to complete the transaction. Paramount Skydance shares closed at $8.03, falling 2.19 percent following recent market updates. Additional legal scrutiny involves federal oversight, with the Federal Communications Commission reviewing broadcast license transfers and requests regarding Gulf sovereign wealth fund stakes.
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