David Ellison may be calling Paramount’s agreement to delay its $111 billion Warner Bros. Discovery acquisition a “significant win.” But Wall Street appears less convinced.
Paramount Skydance shares sank to a new low after the company agreed Friday not to close the deal until the antitrust lawsuits brought by 12 state attorneys general and the Writers Guild of America are resolved — or until next June, whichever comes first.
The delay starts an expensive clock. Beginning in October, Paramount must pay WBD shareholders roughly $7 million a day, or about $650 million per quarter, while the acquisition remains unfinished. Even a resolution early next year could cost close to $1 billion. A fight stretching to June would push the bill toward $2 billion — on top of the nearly $80 billion in debt the combined company is already expected to carry.
“The state AGs are clearly making a lot more noise than they probably were expecting,” MoffettNathanson senior analyst Robert Fishman tells Sean McNulty on a bonus episode of Ankler Agenda.
The central question for investors is no longer simply whether the acquisition ultimately closes. It is whether Paramount can afford the prolonged fight — and what condition both companies will be in when it ends.
“PSky shares are already reflecting that delayed closing,” notes Fishman, as Paramount Skydance’s stock hit a 52-week low.
“What investors have to weigh today is how reasonable it is that the company can afford to pay those debt payments over not just the next couple of quarters, but really the next few years.”
That calculation becomes more precarious as the traditional television businesses at both companies continue to melt down. Those cable and broadcast assets are supposed to produce much of the cash needed to service the combined company’s obligations. Every additional quarter before closing gives investors another look at how quickly that foundation may be crumbling.
Paramount is pressing for a trial as soon as this fall. California Attorney General Rob Bonta, who is leading the states’ case, has said he expects proceedings to begin in 2027 and has shown little appetite for a negotiated resolution. “We’re not talking about settlement,” he told Elaine Low on Friday. “We’re not going to have oligarchs or kings in the economy.”
And the longer the case runs, the more relevant another question becomes: What happens to Warner Bros. Discovery if the deal fails?
Fishman points to HBO, Warner Bros. and HBO Max as premium assets that would likely attract interest again. But the landscape could look very different by then, including for Netflix, which previously explored a bid and whose sharply lower stock price could complicate any renewed pursuit as it faces its own internal pressures around engagement.
The conversation also turns to NBCUniversal, which is preparing to separate from Comcast. Fishman explains why its combination of studios, theme parks, sports rights, Peacock and linear networks makes it both highly valuable — and far harder to break apart.
For Ellison, though, the immediate challenge is simpler and more daunting: The deal — already unpopular with Wall Street may still be alive, but every day it remains in limbo makes it more expensive — and potentially harder to finance.
And even if Paramount ultimately prevails, another test awaits: how quickly it can combine the two companies and begin making the financial logic of the merger work.
