Paramount-Warner Bros. Merger Likely to Face Delay as Court Weighs Antitrust Challenge

The proposed merger between Paramount and Warner Bros. Discovery is expected to face a delay as executives involved in the transaction anticipate that a US court will temporarily halt the takeover while it considers an antitrust challenge brought by a coalition of state attorneys general.

Although the court has yet to issue a ruling, people familiar with the matter believe a judge is likely to grant a temporary restraining order (TRO), effectively putting the merger on hold for two to three weeks. Despite the anticipated pause, sources close to the deal remain optimistic that the transaction will eventually be completed.

One executive involved in the process said the merger would proceed “one way or another,” although hopes of Paramount taking control of Warner Bros. Discovery as early as next week have largely faded following the legal action.

The uncertainty stems from a lawsuit filed on Monday by 12 Democratic state attorneys general, who argue that the proposed merger would violate US antitrust laws by reducing competition in the media and entertainment industry. The legal challenge has also cast doubt over the future ownership of CNN and other Warner Bros. Discovery assets.

Paramount has consistently maintained that it expects the merger to close before the end of September, although the company had privately hoped to complete the transaction in July after securing regulatory approvals in several jurisdictions. In a recent statement, Paramount noted that numerous antitrust regulators around the world had already approved the deal, concluding that the combination would create a stronger competitor to major streaming and technology companies.

Among those approvals was clearance from the US Department of Justice, which approved the merger last month without imposing any conditions. However, several of the state attorneys general have questioned whether that approval was influenced by President Donald Trump’s relationship with the family that owns Paramount. They argue that the states are pursuing the lawsuit because federal authorities have failed to adequately protect consumers.

The merger also continues to face regulatory scrutiny outside the United States. In the United Kingdom, Culture Secretary Lisa Nandy has indicated she is considering intervening in the transaction, while the European Commission is expected to decide by July 22 whether to approve the deal after Paramount offered concessions to address competition concerns.

The attorneys general are asking the court to prevent Paramount and Warner Bros. Discovery from completing the merger while the antitrust case is heard. A hearing on the request for a temporary restraining order has been scheduled for Friday.

The companies are also facing separate legal challenges. A consumer lawsuit filed on behalf of Paramount+ subscribers is progressing through the courts, while the Writers Guild of America has filed its own case in California, arguing that the merger would reduce the number of major buyers for television and film projects, ultimately harming writers.

Paramount has rejected those claims, saying that a combined company would have greater financial strength to compete in a rapidly changing entertainment industry and would create more opportunities for writers rather than fewer.

If the court grants the temporary restraining order, attention will shift to arguments over a preliminary injunction, which could delay the merger for several months. Despite that possibility, Paramount’s lead trial counsel, Jeffrey Kessler, said the company still expects to complete the transaction before the end of September.

Kessler also confirmed that Paramount would appeal immediately if the court blocks the merger, adding that the company is prepared to take the legal battle as far as the US Supreme Court if necessary.

The timing is significant because the merger agreement includes a provision requiring Paramount to pay an additional 25 cents per Warner Bros. Discovery share for every quarter the deal remains incomplete after October 1. That clause could add hundreds of millions of dollars to the overall cost of the acquisition, giving Paramount a strong financial incentive to conclude the transaction as quickly as possible.