Paramount Skydance CEO David Ellison speaks during a company event as the proposed acquisition of Warner Bros. Discovery faces a legal challenge in U.S. court.


 Paramount Delays Warner Bros. Deal as States Challenge Merger

OAKLAND, California — July 24, 2026

Paramount Skydance has agreed to pause its proposed $110 billion acquisition of Warner Bros. Discovery while a legal challenge from a group of U.S. states moves through the courts, adding fresh uncertainty to one of the entertainment industry's largest merger plans.

The agreement delays completion of the transaction until a court issues a ruling, with the pause expected to last until next June at the latest. The decision slightly shortens the court schedule but could significantly increase the financial cost of the delayed merger.

Under the merger agreement, Paramount may have to pay Warner Bros. Discovery shareholders up to $1.7 billion in delay-related fees if the acquisition is not completed by next June. The agreement requires the company to pay $7 million per day if the deal remains unfinished after September 30.

A coalition led by California and joined by 11 other U.S. states filed a lawsuit on July 13 seeking to block the merger. The states argue that combining the two media companies would create an entertainment giant with excessive market power, potentially reducing competition and leading to higher prices for film and television content.

Paramount said it remains confident in its legal position and plans to defend the merger in court. Meanwhile, New York Attorney General Letitia James, whose office is part of the lawsuit, described the pause as an important step while the case is considered.

Recent merger cases of a similar scale have taken an average of about eight months to receive a court ruling, according to a review of comparable legal proceedings.

The outcome of the case could determine whether Paramount Chief Executive David Ellison can move forward with his strategy to expand the company into a stronger competitor against major streaming and entertainment companies such as Netflix and Disney.