Paramount CLO slams 'weaponized' antitrust suit as ticking fees mount

The lawsuit represents a significant strategic hurdle for the Paramount-WBD consolidation, testing whether state-level antitrust enforcement can stall a deal already cleared by federal regulators. If the states succeed in delaying the trial until 2027, the astronomical ticking fees could fundamentally alter the transaction's financial viability or lead to forced divestitures in theatrical distribution and linear cable. For the broader ecosystem, this case highlights a growing regulatory disconnect: legacy media defines competition via tech platforms, while regulators remain focused on traditional theatrical and cable concentration. The immediate signal to watch is the court's upcoming ruling on the TRO, which determines if the September 30 closing window remains achievable.

The state-led challenge serves as a pivotal test for the 'Skydance-era' consolidation of legacy media. While the U.S. Department of Justice (DOJ) approved the $110 billion merger in June 2026 without requiring divestitures, the coalition of 12 states—including New York and Colorado—maintains that the federal review overlooked the harm to local consumer choice and theater leverage. Per the DOJ’s June 2026 closing statement, federal regulators determined the transaction was not likely to harm competition in SVOD or linear markets, a finding the states are now vigorously contesting in the Northern District of California.

This legal friction mirrors other recent regulatory interventions in the sector. Per the Daily Journal, July 2026, Judge Martínez-Olguín cited a recent preliminary injunction that blocked Nexstar Media Group’s attempted acquisition of Tegna as a relevant precedent for freezing large-scale media deals. Furthermore, the financial stakes are heightened by competitive dynamics; Paramount executives noted in February 2026 that the deal followed a months-long bidding war with Netflix. The inclusion of a $7 million daily ticking fee highlights the urgency for the Ellison family and David Zaslav to secure a court date before the September 30 deadline.

Beyond domestic courts, the merger continues to face international scrutiny. Per reports from June 2026, European antitrust regulators completed a phase 1 review but required further analysis under the Foreign Subsidies Regulation, with a target decision date in mid-July. While the merger has secured approvals in markets like Australia and Saudi Arabia—where regulators deemed the theatrical impact minimal—the domestic state-level challenge remains the most immediate threat to the deal's closing timeline and overall cost structure.