A California federal judge overseeing multiple lawsuits related to the proposed $110 billion acquisition of Warner Bros. Discovery Inc (WBD.US) by Paramount Skydance Corp (PSKY.US) has extended the transaction's suspension period by two weeks, until August 17th. US District Judge Araceli Martinez-Olguin issued the extension order on Thursday.
She still plans to hold a hearing on August 3rd to discuss whether to further postpone the deal before a trial scheduled for next year that aims to permanently block it. At that hearing, the judge will consider two separate lawsuits: one brought by a coalition of state attorneys general led by California, and another filed by the Writers Guild of America. On Monday, Judge Martinez-Olguin initially paused the deal for two weeks, setting the August 3rd hearing date. The hearing is now scheduled as a brief evening session at the federal courthouse in Oakland, California.
However, Paramount Skydawn Corp is pushing for a three-day evidentiary hearing later in August, which would include testimony from multiple witnesses. Paramount Skydawn Corp has repeatedly stated that the deal would survive legal challenges if the company is allowed to present evidence showing the merger would inject much-needed competition into Hollywood and enable it to better compete with tech giants like Netflix and Amazon. The states oppose this request and want the transaction suspended as quickly as possible until a full trial in April of next year. The judge has not made a final decision but has ordered both sides to attempt to reach a compromise by July 24th.
Paramount Skydawn Corp is racing against time and pushing to move things forward as quickly as possible. The company has committed to paying Warner Bros. shareholders approximately $7 million per day if the deal fails to close by October 1st. This condition was key in winning a fierce bidding war against Netflix for control of the historic studio. However, waiting for an April trial and subsequent ruling could cost the company over $1.5 billion. If the deal fails due to antitrust concerns, either party can walk away starting in June 2027, and Paramount Skydawn Corp would owe Warner Bros. an additional $7 billion in termination fees. The states argue the deal would harm competition in theatrical distribution and the basic cable market, while the writers' union contends it would reduce competition in the market for their services.