U.S. States Expected to Challenge Paramount/Warner Bros Deal: Report
· BCPosted in: Games, HBO, Max, Movies, Paramount+, TV | Tagged: paramount, warner bros discovery
U.S. States Expected to Challenge Paramount/Warner Bros Deal: Report
Report: New York, California, and other U.S. states will file a lawsuit to block the planned Paramount Skydance/Warner Bros. Discovery merger.
Published Fri, 05 Jun 2026 16:08:10 -0500
by Ray Flook
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Article Summary
- REPORT: Paramount merger plans hit a major hurdle as California, New York, and other states prepare a lawsuit to block the deal.
- Reuters says the state challenge could arrive within days, threatening momentum for the Paramount Skydance-Warner deal.
- Paramount Skydance faces a ticking fee of $0.25 per share each quarter if the Warner Bros. Discovery deal slips past September.
- Paramount’s FCC filing says 49.5% of the merged company would be foreign-owned, raising fresh scrutiny around the merger.
Just when you thought David Ellison's Paramount Skydance and David Zaslav's Warner Bros. Discovery were going to have a pretty smooth sailing ahead of what they're expecting to be a blessing from the Trump Administration for the two multimedia companies to merge, there might be a bit of a speed bump on the way. On Friday, Reuters reported exclusively that California, New York, and several other U.S. states are preparing to file a lawsuit to block the $110 billion deal. The lawsuit is expected to be filed "in the coming week," and the report does not include a finalized list of states that would join the lawsuit.
At the time of this writing, shares of both Warner Bros, Discovery and Paramount were down anywhere between 3% and 6%. But what's more interesting about the move by the states is how it could impact Paramount Skydance financially. As part of the deal for Warner Bros. Discovery, Ellison's company agreed to pay a fee to shareholders beginning in October if the deal was not closed by the end of September. The "ticking fee" is $0.25 per share per quarter until the deal is officially done – or about $650 million per quarter.
"We will continue to fight against any attempt to derail a deal that plainly benefits consumers, creators, and the industry as a whole," a Paramount Skydance spokesperson offered in response, adding that the opposition to the deal "means giving entrenched incumbents like Netflix an advantage they do not deserve."
Back in April, Paramount revealed that nearly 50% of the merged company would be owned by foreign investors. In a filing with the Federal Communications Commission (FCC) on Monday to seek approval for the non-U.S. ownership aspect of the deal, Paramount noted that 49.5% of the company will be owned by foreign investors, including 24% of holdings shared by three Middle East investment funds.
Paramount noted that the investors will allow the company to "compete more effectively in the provision of television broadcast services and in the broader video programming marketplace." Though Ellison's company claims that non-U.S. investors will not have a controlling vote, having news organizations CNN and CBS News run under foreign funding should raise red flags. In addition, the overall deal calls into question the legitimacy of the Trump Administration's "America First" initiative, especially given Netflix's cash offer.
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