Paramount agrees to pause Warner Bros deal while case plays out

Paramount Skydance ​on Friday agreed to pause its acquisition of Warner ‌Bros. Discovery until after a ruling on a challenge by states to the deal, plunging the $110 billion deal into further uncertainty.

The agreement pausing ​the deal until next June, at the latest, trims ​a few weeks off the case schedule. But it also comes ⁠with a price.

Paramount could owe as much as $1.7 billion ​in ticking fees to Warner Bros. shareholders if the deal is ​delayed until then. The fee costs $7 million a day if the merger does not close by September 30.

“We look forward to proving our case ​at trial,” Paramount’s spokesperson said.

California and 11 states sued on ​July 13, arguing the deal would create a media behemoth with the power ‌to ⁠raise prices in film and television.

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“Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” ​said New York ​Attorney General ⁠Letitia James, who is suing to block the deal.

Similar merger challenges have taken an average of ​eight months for a judge to rule, ​a Reuters ⁠review of recent cases found.

The lawsuit, filed in Oakland federal court, threatens to derail Paramount CEO David Ellison’s bid to transform ⁠his ​company into a major rival of ​Netflix and Disney.

Shares in Paramount fell 3.3% Friday and are down 37% this ​year.