Paramount and WBD antitrust lawsuit could prevent further media deals

The long-awaited media M&A has finally appeared to be getting off the ground in recent months.

However, the delay is paramount skydance $110 billion takeover offer warner bros discovery Industry insiders are currently citing a lack of interest in mergers and acquisitions.

Last month, Paramount agreed to put its partnership with WBD on hold until June 2027, about nine months after the planned closure, while antitrust claims brought by a group of state attorneys general go to trial. The New York Times recently reported that Paramount and California Attorney General Rob Bonta, who is spearheading opposition to the partnership, would begin preliminary settlement talks, but the paper said those talks were quickly broken off.

The deal had already received approval from global regulators, including the U.S. Department of Justice’s Antitrust Division.

Media executives and onlookers say the Paramount mega-merger could be the only one frozen due to the threat of increased scrutiny from state regulators and a process that could take months to resolve.

“It feels like the landscape for big deals and combinations has changed a lot in recent weeks,” said Jonathan Miller, a media industry veteran who is now CEO of Integrated Media, which owns a portfolio of media and creator ventures.

“I think there will be a lull in trading,” Miller said.

What once felt like a merger-friendly regulatory environment during President Donald Trump’s second term now feels hampered by the threat that states might take over the regulatory baton.

U.S. companies have concluded just over 7,500 deals so far this year through Aug. 20, up from 7,015 in the same period last year, according to data provider Dealogic. As more megadeals cross the finish line, the value of collective deals is also increasing significantly.

Media companies have been eager to join the effort, looking to cut costs and expand their operations amid an exodus of pay-TV subscribers.

In addition to Paramount’s acquisition of WBD (which came months after David Ellison’s Skydance completed its acquisition of Paramount), the industry has also announced mergers, spinoffs and partnerships that account for tens of billions of dollars in media market capitalization.

Fox Co., Ltd. plan to obtain Roku For $22 billion. comcastafter separating its cable network portfolio into: Versantis currently planning an NBCUniversal spinoff. NBCUniversal also recently signed partnerships with its Peacock streaming service and YouTube. Netflix also came to the negotiating table after a long commitment to build rather than buy.

Even though this deal has relatively few antitrust concerns compared to Paramount-WBD, the future of Fox and Roku’s marriage has been called into question in a recent analyst note. The deal was snubbed by investors in June, but is still seen as a strategic pivot to streaming for Fox.

Bernstein analysts said there could be “regulatory timing risks, especially given the ongoing PSKY-WBD process.”

“While we do not believe the Roku transaction raises significant horizontal or vertical concentration concerns, current regulatory developments regarding the PSKY-WBD process indicate that the timing of the transaction may be unpredictable even where the underlying antitrust claims appear relatively weak,” Bernstein analysts said in a note.

The deal between Fox and Roku is expected to close in the first half of 2027.

CNBC previously reported that a similar movement is occurring among broadcast station owners eager to consolidate. Nexstar Media Group The $6.2 billion acquisition of Tegna was announced in August 2025 and officially closed in March, but a group of state attorneys general filed a lawsuit seeking to terminate the deal. A trial is scheduled for next year.

Meanwhile, Comcast’s plan to separate NBCUniversal is expected to be completed next summer, and when the move was announced in June, expectations for further M&A quickly rose.

Once the companies trade as independent entities, they will be in a better position and have more flexibility to do business. NBCUniversal will include Universal Movie Studios, the Peacock streaming business, the NBC broadcast network and related assets, while Comcast will house its Xfinity-branded services, including broadband and mobile.

Executives at NBCUniversal and Comcast have previously criticized the separation as a deal-making move, but once the spinoff is complete, the companies will no doubt have more M&A avenues.

As NBCUniversal prepares for its future as an independent company, internal discussions have centered on partnerships, bundling and other similar opportunities with media and tech companies, according to people familiar with the matter. M&A is not a topic of discussion in the short term, but minority shareholder opportunities could be on the table, said two people familiar with the matter, who asked not to be identified discussing internal strategy.

Comcast’s incoming CEO Michael Angelakis, known in the industry as a dealmaker, said on a conference call with investors that he believes Comcast has the scale to compete, but did not rule out future M&A. A much-speculated merger with cable peer Charter Communications appears unlikely, but other opportunities in the broadband and tech industries could also be attractive, one of the people said.

But executives from the soon-to-be-split companies are likely to avoid M&A talks until the Paramount-WBD process is resolved, some people said, taking the outcome as an indication of what deals are and aren’t viable in a more scrutinized environment.

Comcast and NBCUniversal leadership are becoming less inclined to consider short-term deals with such potential regulatory pressures, the people said.

NBCUniversal has frequently surfaced as a potential acquisition target over the years, as has Warner Bros. Discovery. Both companies have similar portfolios consisting of linear TV, film production, and streaming.

If the Paramount-WBD marriage is blocked by the state’s AG, NBCU could become less attractive to some suitors.

Integrated Media’s Miller said a stagnation in media M&A could spur an increase in alliances and bundles.

NBCUniversal’s Peacock deal with YouTube to effectively bring content from NBCU to YouTube for premium subscribers could serve as a model for one of these options. YouTube has long topped Nielsen’s list of streaming viewers, and deals to embed traditional media content into technology platforms could become more common.

Many in the industry argue that creating bundles between different streaming services is the most consumer-friendly and profitable alternative to the current decentralized ecosystem. Peacock and Apple TV offer bundle plans, Disney offers bundles of various streaming services (Disney+, ESPN, Hulu), and Fox One and ESPN offer separate bundles.

NBCUniversal has been in talks with various media players about potential bundles and content partnerships similar to the recently announced deal with YouTube, according to one of the people familiar with the matter.

Instead of M&A, media companies may focus more on deals with content creators and intellectual property to power their platforms. Media companies are attracted to add this content along with short-form programming to their platforms to attract younger viewers.

One thing is for sure: Mr. Ellison’s Paramount won’t merge with WBD as easily as planned.

Ellison and WBD CEO David Zaslav recently expressed confidence in the deal, but any delay would be costly for Paramount. Under the terms of the agreement, starting Sept. 30, Paramount will have to pay WBD shareholders a so-called ticking fee the longer the deal is delayed. This fee could amount to approximately $650 million in cash per quarter.

Last week, Paramount filed a motion to force the suing states to post $1.88 billion in bail to cover ticking fees and other costs associated with the delay.

In any case, the economics of the deal look very different if it closes in June of next year than it does in September of this year. Similar holdup threats could permeate deal discussions and change financial terms in other deals.

“The battle over market definition has just come with a price tag,” said Mike Proulx, vice president and director of research at Forrester. “The March 2027 trial date turns what was an abstract antitrust dispute into a potential multibillion-dollar delay cost before the court decides.” “The deal could still go through, but the scenario where it goes completely through is no longer there.

“Paramount could still argue that states narrowly define their markets, but it would just be very expensive to prove that point,” Proulx said.

Disclosure: Versant Media Group is the parent company of CNBC.