Paramount Skydance leadership might have claimed that the company’s decision to pause its planned merger with Warner Bros. Discovery while dual antitrust cases work their way through court was a “significant win,” but monopoly expert Matt Stoller, writer of the BIG newsletter, doesn’t agree.
“It’s a big loss for Paramount to do this, or a tactical loss. It makes them look stupid. It makes them look unprofessional,” Matt tells me.
The antitrust lawsuits brought by 12 state attorneys general and the Writers Guild of America have halted the merger for now; Paramount cannot close its deal until the cases resolve or the calendar hits June 2027, whichever comes first.
And while Paramount has expressed confidence in the eventual outcome — “this is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached,” a spokesperson said Friday — Matt isn’t certain that’s the reality.
“They’re kind of in shambles right now,” Matt says, noting that Paramount this past weekend changed lead litigators, shifting Wilkinson Stekloff attorney Beth Wilkinson — who successfully defended Microsoft during its 2023 acquisition of Activision — into the top role.
“It’s not over,” he adds. “There is going to be a trial. Paramount could very well win that trial. But it is a serious antitrust case that they now have to take on. And everybody acknowledges there are real questions of competition here that have to be answered.”
We don’t love to say “I told you so” around these parts, but the state AGs’ challenge is something Matt predicted back in February when Paramount first moved to acquire WBD.
“If the state AGs get a complaint in before they close, then what will happen is a judge will say, ‘Hold off, don’t close. You’ve got to operate these entities separately until the trial is over,’” Matt said then. “And it can be up to 15 months before that trial takes place. So, during that period, these are separate companies that are still running. Then the trial happens, and a judge will decide whether to allow the merger.”
Six months later, his forecast is playing out almost exactly as described.
“I think there’s probably a 60 percent chance that the merger gets blocked at this point,” he tells me now, “either through legal risk or through financing risk because there’s a small chance the financing falls apart. The financing behind this is coming from the Middle East, from the banks and from Oracle — and Oracle stock has really collapsed.”
The risk has also grown beyond the states’ case. Matt believes the WGA lawsuit — and testimony from prominent writers — could materially strengthen the challenge at trial.
“I think Paramount is going to be extremely nasty about not turning over documents, about not doing depositions,” he says. “This is new for the states. They’re not used to litigating merger cases. They have some people who have done it before. They hired them from DOJ and whatnot. So having the Writers Guild there and having writers like Mike Schur and Adam McKay, who are speaking out and saying, ‘Look, I’m an important writer. I’ve seen how this works, and these mergers are a problem’ — I think that’s a very powerful thing for a judge to hear.”
One thing we haven’t heard all that much about is what Paramount actually is excited about doing with Warner Bros. Discovery once it gets the keys — beyond, of course, David Ellison’s promise to release 30 movies a year into theaters.
“These guys from Paramount are talking about all sorts of things. They’re talking about Israel. They’re talking about the antitrust law and precedent they’re gonna break, they’re talking about how this is all an anti-Trump plot or whatever it is,” Matt says. “The one thing they’re not talking about is what they’re gonna do with the merged entity. They’re not talking about all the cool TV shows they’re gonna make, the movies that they’re gonna build, the innovative products that they’re gonna come out with. It is a very strange thing that they just don’t really seem excited about building a great movie studio and TV studio and distribution arm. They just seem excited about buying things. It’s weird.”
