Paramount said on Friday that it had agreed to halt its merger with Warner Bros. Discovery until next June at the latest while a judge considers a lawsuit from state attorneys general who sued to block the deal. The delay throws into doubt the future of a deal that would remake Hollywood.
In a legal filing, Paramount and the state attorneys general said that they had reached an agreement to freeze the $111 billion merger while the case works its way through court, extending a shorter pause imposed this week by a federal judge in California. The merger agreement expires on June 4, 2027, if the deal has not closed by that date.
The proposed delay does not take effect until it is approved by Judge Araceli Martínez-Olguín, who is overseeing the case.
The deal would unite under one roof two major movie studios, the streaming services HBO Max and Paramount+ and networks including CBS and CNN. David Ellison, the tech scion who runs Paramount, has aggressively pushed to acquire Warner Bros., ultimately outbidding Netflix after proposing a handful of escalating offers.
The standstill could be costly for Paramount. The company agreed to pay Warner Bros. Discovery shareholders a fee of $650 million for every quarter that the deal does not close, beginning in October.
The coalition of 12 states led by California, include New York, Connecticut, Oregon and Arizona. Letitia James, the New York Attorney General, called the freeze “a crucial victory” in a statement.
“From the workers and artists who bring stories to life to the families who buy tickets at the box office, Paramount’s illegal takeover of Warner Bros. is a bad deal for all those who count on a competitive entertainment industry,” Ms. James said.
Paramount also described the delay as a “significant win” because it gives the company “a direct path to a trial based on the evidence,” a spokeswoman said. “This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators.”
This is a developing story. Check back for updates.
Seamus Hughes contributed research.
