Paramount Skydance agreed to a longer-term delay of its $111 billion acquisition of Warner Bros. Discovery, preventing the companies from combining until after a judge rules on the merits of a case in which a dozen states challenged the legality of the merger.

Under a stipulation filed in court today, the states and companies agreed that the merger will not be completed and the firms will not integrate their operations until "five days after the merits determination in these matters," or on June 1, 2027, whichever is earlier. The delay was also agreed to by the Writers Guild of America, which filed its own lawsuit to block the merger. If there is no merits determination by June 1, the plaintiffs could seek a preliminary injunction to keep blocking the deal.

The agreement amounts to "a months-long halt" to the merger, New York Attorney General Letitia James' office said. “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," James said.

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Paramount Skydance is accusing Netflix of maintaining a campaign against its proposed acquisition of Warner Bros. Discovery (WBD).

In a June 5 letter (PDF) addressed to Jared A. Hughes, acting section chief of the Media, Entertainment, and Communications Section of the US Department of Justice's (DOJ's) Antitrust Division, and A. Maya Kahn, a trial attorney for the Antitrust Division, and first reported on by Politico today, Paramount chief legal officer Makan Delrahim accused Netflix of trying to influence stakeholders about the merger. The letter reads:

Indeed, Netflix’s panic-level response and scorched-earth campaign to try and poison regulators and other stakeholders against the Transaction shows just how seriously Netflix takes Paramount as a scaled competitor.

The letter from Delrahim, a former assistant attorney general for the Antitrust Division, is a response to a letter that The International Brotherhood of Teamsters sent to the DOJ in March. The teamsters' letter argued that Paramount and WBD's merger would threaten film and TV workers. The union, which has 1.3 million members, asked the DOJ to block the merger "unless substantial and enforceable safeguards are put in place to increase domestic production and protect jobs," per an announcement from the group.

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