Paramount’s planned acquisition of Warner Bros. Discovery could be nearly a year away from closing.
In a court filing Friday, Paramount has agreed to pause any steps toward its proposed acquisition of Warner Bros. Discovery until as late as June 1 of next year, or until the current legal challenge against the merger is decided upon, whichever date comes first. The company had sought to close the deal this month, but that timeline had already been delayed after 12 states sued to block the deal and won a temporary restraining order.
With the agreement, the states have withdrawn their motion for a preliminary injunction.
The overwhelming majority of the attention toward the Paramount-WBD merger has been on the combination of the companies’ respective movie studios and on the potential implications of Paramount acquiring CNN. Comparably little has been said about sports, other than to note the number of properties the combined entity would own, but a delay would have implications for sports programming.
In the event that the deal truly is delayed until as late as June, it would mean that TNT Sports will continue to exist as an independent entity for another complete college sports season and nearly all of the NHL season, a timeline that would make it impossible for events like this season’s College Football Playoff or Stanley Cup Final to move up from TNT to CBS (if that were even desirable for the company or contractually feasible, neither of which is actually clear).
It could also potentially complicate the upcoming NHL media rights negotiations with TNT, which will begin at some point next year. NHL commissioner Gary Bettman has repeatedly indicated his excitement about Paramount potentially acquiring WBD and the possibilities that could open up for the league.
The delay also creates the possibility that the deal could fall apart altogether, at which point the future of Warner Bros. Discovery would again be in question. WBD had begun the process of spinning off its linear networks into a separate business (“Discovery Global”) before beginning sale talks last fall, and was poised to do under the original winning bid by Netflix, but abandoned that plan after Paramount mounted its successful hostile bid to acquire the entire company.
More immediately, Paramount is on the hook for hundreds of millions in ‘ticking fees’ owed WBD shareholders for every quarter beyond Q3 — which ends September 30 — that the deal does not close. It would be liable for $7 billion in termination fees if the deal falls apart altogether.
