Hollywood Deal: Paramount Halts Warner Takeover Amid Antitrust Lawsuits

Hollywood giant Paramount has temporarily halted its planned acquisition of rival Warner Brothers, following antitrust lawsuits filed by twelve US states and the Writers Guild of America. The significant deal, valued at over $100 billion, will not proceed further until a resolution is reached on the legal challenges or by June 1, 2027, according to court documents.

The legal battle carries implications, particularly concerning the editorial independence of CNN, a Warner Brothers subsidiary. Critics of the current US administration fear that CNN might lose its autonomy under Paramount's ownership. A judge had initially suspended the deal until mid-August to consider the states' and the union's request for a preliminary injunction against the takeover. The judge indicated she was taking the antitrust concerns seriously.

With Paramount suspending the acquisition, the immediate demand for a preliminary injunction has become moot. The separate lawsuits from the states and the screenwriters' union have now been consolidated into a single proceeding. The delay could prove expensive for Paramount, which had committed to making additional quarterly payments to Warner shareholders for every quarter after September 30 of this year until the acquisition is finalized. This could amount to approximately $650 million per quarter.

Ironically, Paramount had argued that its proposed deal with Warner would face fewer antitrust hurdles compared to a potential takeover by streaming giant Netflix, which was ultimately outbid. Warner and Paramount had set June 4 of next year as the deadline to finalize the deal. In the event the acquisition fails, Paramount agreed to pay Warner a $7 billion penalty.

The family of software billionaire Larry Ellison, known for supporting former President Donald Trump, stands behind Paramount. Warner had initially agreed to sell its streaming and studio assets to Netflix last year. However, Paramount submitted a higher bid for the entire Warner Bros. Discovery company, including television channels like CNN. The current deal is valued at approximately $111 billion (about 98 billion euros). Critics of Trump point to a shift in tone at Paramount's CBS network towards the US government after the Ellison family's involvement, noting Trump's stated interest in CNN changing ownership during a Warner deal.