The most optimistic timeline for Paramount’s acquisition of Warner Bros. Discovery has been pushed back as the deal faces mounting pressure from several different sources.
The earliest date Paramount can close its $110 billion acquisition of Warner Bros. Discovery has been pushed back from Thursday, July 16 to Wednesday, July 22, according to a report by Jody Godoy of Reuters, a delay that occurs as the transaction faces increasing scrutiny from state attorneys general and overseas regulators.
Oregon Attorney General Dan Rayfield is asking a local court to force Paramount to provide documents for an investigation into the transaction and to impose a 60-day delay for any closure. The Oregon Department of Justice said in a press release Tuesday that Paramount did not comply with a request for records related to potential lobbying of public officials, any role the company may have played in a U.S. Department of Justice statement approving the deal, and any internal efforts to receive regulatory clearance.
While the current delay would not meaningfully impact the timeline, any further hold would run the risk of triggering the quarterly ‘ticking fee’ Paramount committed to paying WBD shareholders as part of its deal. The $0.25/share “ticking fee” would be calculated daily for every quarter the deal is not closed “beginning after September 30, 2026,” reportedly equating to about $650 million/quarter. Paramount would owe WBD a $7 billion termination fee if the deal does not close due to not receiving regulatory approval.
“We’re not going to let Paramount Skydance play hide the ball so they can rush through their massive merger,” Rayfield said in a statement, adding later that “Paramount had every opportunity to hand over records and answer a few basic questions. Instead, it is trying to run out the clock and evade scrutiny. We’re asking the court to make sure Oregonians get the answers they’re owed before this deal closes, not after.”
The media conglomerate has already received regulatory approval from several governments across the globe, some of which include the United States, Canada, Australia, China, South Africa and Serbia. United Kingdom culture secretary Lisa Nandy said last month that she is “minded to intervene” in the transaction, citing the public interest and maintaining pluralities “of views in news media” and “persons with control of the media enterprises.” The European Union is said to have extended a “new provisional deadline” for its Phase 1 investigation about the deal to Wednesday, July 22, which reportedly occurred after Paramount submitted commitments in late June.
A coalition of U.S. state attorneys general could reportedly file a lawsuit against the transaction. California Attorney General Rob Bonta wrote in a statement in February that the state was “taking a very close look” at the transaction and that they are “committed to fighting market consolidation that we find unlawful.” Paramount is already facing a federal antitrust lawsuit filed in California by “subscribers and individual viewers of streaming and cable television programming, consumers of news media, and consumers of theatrical exhibition.”
If Paramount is successfully able to close its acquisition of Warner Bros. Discovery, the combined company would have net debt of $79 billion leveraged at 6.5x EBITDA before synergies. The company has projected synergies of more than $6 billion from the deal, a majority of which “comes from non-labor sources,” per Paramount chief strategy officer Andrew Gordon. This would be on top of the already $3 billion in synergies Paramount committed to when the existing company formed through a merger with Skydance Media.
Paramount would acquire the WBD studio and streaming assets in addition to linear networks that were once slated to be spun into a standalone, publicly-traded company. This would also place MCBB March Madness networks CBS, TNT, TBS and truTV within the same company, forming a sports portfolio that would also include the NFL, college football, MLB, NASCAR and NHL.
