U.S. Federal Judge Araceli Martínez-Olguín set the date of March 2, 2027 as the start of the trial to review the antitrust complaint filed by 12 U.S. State Attorneys General to block the merger of Paramount and Warner Bros. Paramount CEO David Ellison had lobbied for an earlier trial date, California Attorney General Rob Bonta requested a later date.
The March trial date will further exacerbate Paramount, with the costs to complete the merger growing while uncertainty about the transaction reigns. Paramount had committed to close the WB acquisition quickly, setting an additional “ticking fee” penalty of $650 million per quarter for every quarter beginning with Q4 2026 while the deal has not yet closed. Paramount is also on the hook to pay Warner Bros. a $7 billion breakup fee if the deal is cancelled outright.
By the trial being pushed out to next March, it is now certain that Paramount will have to pay WBD shareholders at least $1.3 billion as a result of these ticking fees. The delay also causes both companies to operate in a state of paralysis in the meantime, with planned synergies put on hold until this litigation is resolved.
This lack of resolution is causing anxiety for the two companies and the industry overall. WBD recently sued Amazon/MGM for poaching a WBD marketing executive who left out of concern that she might be laid off by Paramount once its acquisition of WBD had gone through. The longer the deal remains in limbo the greater the risk that other WBD employees could jump ship. Execs from both studios and exhibitors are also announcing their support of the merger, including Lionsgate CEO Jon Feltheimer and Regal CEO Eduardo Acuna. In Lionsgate’s quarterly earnings call with its investors, Feltheimer commented, “I’m in favor of this transaction, but most importantly, I’m in favor of certainty and I’m getting all of the delay out of it.”
