• Paramount agrees to delay its $110 billion merger with Warner Bros until legal issues are resolved.
• The halt follows a lawsuit from 12 states, raising concerns over competition.
• Paramount could face costs of up to $1.7 billion if the merger is delayed until June 2027.

Paramount Skydance has confirmed a postponement of its $110 billion acquisition of Warner Bros Discovery until after a federal judge rules on ongoing lawsuits from 12 states that challenge the deal's legality, according to court documents filed on Friday Reuters. The settlement mandates that the deal cannot close until five days post-ruling or by June 1, 2027, whichever is sooner.

This delay could cost Paramount about $7 million daily in fees it committed to pay Warner Bros shareholders if the merger doesn't finalize by September 30. State officials, including New York Attorney General Letitia James, argue that the merger would harm competition and diminish consumer choices in Hollywood, with James stating, "Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries" CBS News and India Times.

Additionally, Paramount has expressed its belief that the merger would enhance competition and create opportunities for writers and filmmakers, contradicting the claims made by the states. The court will likely take several months to evaluate the merger's legal ramifications, as similar cases have historically taken around eight months for resolution Al Jazeera and India Times.