Paramount Agrees to Postpone Warner Bros. Merger Until June 2027 (variety.com) 20
Paramount Skydance has agreed to postpone its $111 billion Warner Bros. Discovery merger until five days after an antitrust trial or June 1, 2027, whichever comes first. The agreement with a 12-state coalition led by California effectively shelves the deal for months while states argue it would reduce competition in cable and theatrical markets. Variety reports: Paramount had been keen to close the deal before Sept. 30, when it will begin to incur a $7-million-a-day "ticking fee" to be paid to Warner Bros. investors. The agreement is a tacit acknowledgement that that will not happen, barring a settlement with the states. Paramount previously sought a three-day hearing on the injunction motion in late August, hoping to win the judge's blessing to close the deal sometime in early September. But the states resisted that idea, saying they would need more time to take discovery and prepare for a full trial on the merits. The states were due to file their injunction motion on Thursday night, but held off as the two sides held discussions on a path forward. In a statement, the company said the agreement is a "significant win."
"Today's agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence," a Paramount spokesperson said. "This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached. Plaintiffs' market definitions bear no relationship to the realities of today's marketplace and cannot withstand scrutiny. We look forward to proving our case at trial."
A hearing was scheduled for Aug. 3 in federal court in Oakland, at which point the two sides were expected to argue over the injunction motion. The two sides agreed to cancel that hearing. U.S. District Judge Araceli Martinez-Olguin approved the joint stipulation on Friday afternoon, about an hour after it was entered. The Writers Guild of America filed its own motion for an injunction earlier this week, which was also set to be heard on Aug. 3. That motion has been withdrawn, as Paramount has effectively conceded that it will not close the deal until a determination of the merits of the antitrust claims. The parties also agreed to submit a joint stipulation by July 31 on their respective positions on trial scheduling. The states previously proposed to hold the trial in April 2027.
"Today's agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence," a Paramount spokesperson said. "This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached. Plaintiffs' market definitions bear no relationship to the realities of today's marketplace and cannot withstand scrutiny. We look forward to proving our case at trial."
A hearing was scheduled for Aug. 3 in federal court in Oakland, at which point the two sides were expected to argue over the injunction motion. The two sides agreed to cancel that hearing. U.S. District Judge Araceli Martinez-Olguin approved the joint stipulation on Friday afternoon, about an hour after it was entered. The Writers Guild of America filed its own motion for an injunction earlier this week, which was also set to be heard on Aug. 3. That motion has been withdrawn, as Paramount has effectively conceded that it will not close the deal until a determination of the merits of the antitrust claims. The parties also agreed to submit a joint stipulation by July 31 on their respective positions on trial scheduling. The states previously proposed to hold the trial in April 2027.
It'll be a short wait. (Score:1)
My guess is DJT is just making them wait until the check clears.
Re: (Score:2)
Since this is brought by the states, there probably isn't anything he can (legally) do.
Not about competition, it's tax revenue (Score:2)
The state legislatures, state regulators and politicians of all kinds need more large organizations with deep pockets to fund campaigns, lobby for new laws, be in a lawsuit with the government to make state prosecutor's careers, etc.
It is not about preserving competition.
It they were about encouraging competition or correcting anti-competitive behavior, the states would have split Wells Fargo bank int o 50 state level banks after the nation-wide identify theft scandal.
The would not settle for a large payoff
Re: (Score:2)
The Trump admin already cleared the merger. These states weren't having it, and sued since the Feds were not. Trump can't do anything to make this suit go away.
a lot of BS (Score:2, Interesting)
In a statement, the company said the agreement is a "significant win." "Today's agreement is a significant win because the result is exactly what we have sought from the outset
no. just a few lines earlier:
Paramount had been keen to close the deal before Sept. 30
Re: (Score:2)
no. just a few lines earlier:
Paramount had been keen to close the deal before Sept. 30
It will cost Paramount about $7 million per day as payment to WBD stockholders for delays beyond Sept 30th. Of course they wanted to close by Sept 30th ($650M each quarter is real money).
Re: (Score:2)
Paramount had been keen to close the deal before Sept. 30, when it will begin to incur a $7-million-a-day "ticking fee" to be paid to Warner Bros. investors. The agreement is a tacit acknowledgement that that will not happen, barring a settlement with the states.
maybe there was some clause to prevent stop those payments in the event of a lawsuit?
That's cool (Score:2)
Re: (Score:2)
Re: (Score:2)
ParaSkyWarner will sue the states to recover their $7m/day ticking fees.
Paramount will lose quickly if it tries.
The states aren't responsible for a private deal between companies, and they have sovereign immunity anyway. They're just enforcing antitrust laws.
Re: (Score:2)
Whether or not it's lawfare depends on the merit of the case. And the states' case against the Paramount-Warner merger has merit. Paramount already owns a great many media outlets. It's tenable to argue that acquiring Warner would be too much.
Re: (Score:2)
It's tenable to argue that acquiring Warner would be too much.
And the judge seemed to concur that the argument was at least viable in her statements in regards to the TRO, which suggested to Paramount lawyers that their best action was likely going to be to agree to a delay of the merger and to seek a speedy resolution (trial or negotiated settlement).
Re: (Score:2)
Trump took obvious bribes to ok this merger.
Unless you know there's some equivalent bribery involved on the other side of this lawsuit, your weak both-sides take here is, well, weak.
Re: No dog in the fight (Score:1)
Yes I do. In this particular case, the news divisions of these media companies consistently align with Democratic party messaging.
Political speech being protected explicitly by the 1st amendment, this isn't a bribe the way a bag of cash is a bribe, but it is an exchange of favors when D politicians go out of their way to protect D-aligned media outlets from perceived threats from R-aligned private actors.
Like I said, I have no dog in the fight and don't really pay attention to corporate media on either side
Re: (Score:2)
Some democrats: Monopolies and excessive market consolidation are bad.
Some state attorneys general: Monopolies and excessive market consolidation are bad.
You: It's proof, I tell you! That's obviously just as bad as taking millions in bribes!
An impressive feat, taking a weak argument and turning it into a truly stupid one.
This is still a terrible deal (Score:2)
these mergers should not happen at any time.