Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsParamount-Warner deal at risk of delays costing billionsJudge granted a request from states challenging the deal to pause the tie-up for two weeks, saying it 'likely' violates antitrust lawAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.The Paramount logo is displayed on a water tower at the Paramount Studios lot on July 13, 2026 in Los Angeles, California. Photo by Justin Sullivan/Getty Images filesParamount Skydance Corp. was on the brink of closing its blockbuster US$110 billion takeover of Warner Bros. Discovery Inc. Now the companies are facing a legal hurdle that risks putting the deal on hold for months at a cost that could quickly climb to billions of dollars.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorOn Monday, a federal judge granted a request from states challenging the deal to pause the tie-up for two weeks, saying it “likely” violates antitrust law. But that could be just the start of a much longer delay. In early August, U.S. District Judge Araceli Martínez-Olguín will hold a hearing in Oakland, California, to determine whether the acquisition should be put on ice pending the outcome of a full trial.California and 11 other states opposing the transaction want a trial in April next year. Paramount hasn’t offered an alternative and no date has been set. The companies had previously hoped to close as soon as Wednesday, when European regulators are expected to clear the deal.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againNow, Paramount is facing a race against the clock. If it doesn’t close the deal by the end of September, Paramount must pay late fees to Warner Bros.’ shareholders of about US$7 million per day. That makes an April trial date an eternity for the company that was so close to tying the knot. With the daily fee, an April trial could total well over US$1 billion in extra costs to Paramount.Paramount and Warner Bros. shares were largely unchanged as trading began on Tuesday morning. Paramount had fallen two per cent on Monday, while Warner Bros. was down 3.8 per cent that day.In ordering the brief pause, Martínez-Olguín said the states’ case is in the public interest, is likely to ultimately succeed and would be harmed if the deal closed sooner. The judge must make the same determination in two weeks, meaning the odds are high the states will secure a longer delay.Paramount is expected to appeal if it loses that ruling, but a decision wouldn’t likely come until the end of the year or later.The pause is “certainly not good from Paramount or Warner Bros.’ perspective,” said Craig Huber, a media analyst at Huber Research Partners. “Any delay in this is certainly not good for Paramount,” he said. It is “money they can’t afford.”The Writers Guild of America is also challenging the transaction, arguing that it would harm competition in the markets for film and television writing.Paramount inked the deal in February after beating back Netflix Inc. following a heated bidding war. The takeover unites two iconic Hollywood studios behind legendary films from Casablanca and Harry Potter to Mission: Impossible. It also brings under Paramount’s control two major news networks — CNN and CBS — the streaming powerhouse HBO Max and dozens of cable networks.Paramount argues the deal is a net win for Hollywood and will provide much-needed competition against tech giants like Netflix, Apple Inc. and Alphabet Inc.’s YouTube. The company already won the blessing of the U.S. Justice Department.“We are confident the evidence will demonstrate that the state AGs’ antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,” the company said in a statement Monday after the judge ordered the two-week pause. “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry.”The states’ July 13 lawsuit has thrown a wrench into the deal. They have claimed that the merged company will control over 27 per cent of the market for films widely released to theaters and more than 30 per cent of anticipated blockbusters, widely released films with large production budgets. Post-merger, only four companies would control more than 90 per cent of that market — the new entity, along with Walt Disney Co., Universal and Sony Pictures Entertainment.The states also say the deal will harm licensing of cable TV channels, combining the second and third-largest players in that market with more than 50 channels covering news, sports, general entertainment, kids and family, and lifestyle, giving the company 34 per cent by viewership.The company argues that the combined market shares it will have in film distribution and TV viewing are nowhere near what is illegal under federal antitrust law. Its deal, Paramount says, is about gaining scale.Makan Delrahim, Paramount’s chief legal officer, said the company has repeatedly tried to reach an agreement with California and has already sent a list of proposed fixes to California Attorney General Rob Bonta’s office that could allow the two sides to reach a settlement. Paramount has offered to commit in writing to promises such as releasing 30 movies a year in theaters. Paramount has also said it will increase TV production.Bonta, meanwhile, told The Town podcast earlier this month that he’s not a fan of company promises and prefers structural remedies, such as a divestiture of some of the businesses Paramount is trying to acquire.When asked on the same podcast Monday about selling CNN, or other cable networks and commitments to produce films in California, Delrahim said that Paramount is “open to all legitimate discussions. Nothing’s off the table.”Paramount has a huge incentive to fight for the deal. The company would have to pay US$7 billion to Warner Bros. shareholders if the deal is blocked by regulators. Under the merger agreement, it’s obligated to defend the deal until June 2027. The company, which is already in debt, doesn’t have that kind of money on hand. Chief executive David Ellison would have to once again tap his father, Oracle Corp. co-founder Larry Ellison.While David Ellison has said throughout the extended fight for Warner Bros. that its business model is fine as it is, Paramount has also promised major cost savings from a Warner deal. That includes cuts to expenses of some US$6 billion on an annual basis. Combining Paramount+ with Warner’s HBO Max streaming service will make that business stronger, the company says. Bringing franchises like Harry Potter, Batman and The Lord of the Rings will give the combined companies more ideas for films and TV series going forward, it argues. 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