Last week, David Ellison’s Paramount Skydance agreed to delay the closing of its proposed acquisition of Warner Bros. Discovery until June 2027 as it confronts a legal challenge from a coalition of 12 state attorneys general. The delay gives the companies more time to defend the transaction in court. It also gives almost everything that threatens the transaction more time to get worse.
Paramount already faces an imposing collection of headwinds: shifting legal counsel, declining cable subscriptions, a fragile architecture of financing and an impending “ticking fee” that will increase the cost of delay. But the company’s greatest challenge in the year ahead may be time itself. As Vince Lombardi reportedly said after a close loss: “We didn’t lose the game; we just ran out of time.” Hollywood has seen this movie before, and only a decade ago.
AT&T announced its agreement to acquire Time Warner in October 2016. The Justice Department sued to block the transaction in November 2017, forcing the companies into a lengthy legal battle before AT&T finally completed the acquisition in June 2018.
While AT&T and Time Warner fought in court and then struggled to integrate their operations, an emboldened Disney moved with greater strategic clarity. Disney announced its agreement to acquire most of 21st Century Fox in December 2017, completed the acquisition in March 2019 and launched Disney+ that November. HBO Max did not launch until May 2020.
