Paramount agrees to pause Warner Bros deal while case plays out

By Jody Godoy

July 24 (Reuters) - ‌Paramount Skydance ​on ​Friday agreed to pause its acquisition of Warner Bros. Discovery until after a ruling on a ‌challenge by states to the deal, plunging the $110 ⁠billion deal into further uncertainty.

The agreement pausing the deal until next ‌June, at the latest, trims ‌a few weeks off the case schedule. But it also comes with a price.

Paramount could owe as much ​as $1.7 billion in ticking fees to Warner Bros. shareholders if the deal is delayed until then. The fee ⁠costs $7 million a day if the merger does not close by September 30.

"We ​look forward to proving our case at trial," Paramount's spokesperson said.

California and 11 states sued on July ​13, arguing the deal would create ‌a media behemoth with the power to raise prices in film and television.

"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," said New York Attorney General Letitia James, who is suing ​to block the deal.

Similar merger challenges have taken an average of eight months for a judge to rule, a Reuters review of ‌recent cases found.

The lawsuit, filed in Oakland federal court, threatens to derail Paramount CEO David ‌Ellison's bid to transform his company into a major rival ⁠of Netflix and Disney.

Shares ‌in Paramount fell 3.3% ​Friday and are down 37% this year.

(Reporting by Jody Godoy; Editing by Nia Williams and Deepa ‌Babington)

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