Here’s What Stands in the Way of the Paramount-WBD Merger

Even though it seems like no one in Hollywood supports the proposed merger between Paramount, Skydance, and Warner Bros. – except those hoping to profit from it – the deal is moving closer to happening. Last week, Paramount Skydance overcame a major hurdle by getting Warner Bros. Discovery shareholders to agree to the terms. However, the merger still faces potential issues with regulators and other practical challenges that could ultimately prevent it from going through.

Paramount faces a deadline to complete the deal, as they’ll be charged 25 cents per share each quarter by Warner Bros. Discovery if it’s not finalized by September 30th. If the deal falls through completely, Paramount would have to pay Warner Bros. a hefty $7 billion termination fee. To understand the potential obstacles that could delay or even stop the deal, Vulture consulted Alvaro Bedoya, a former Federal Trade Commissioner, and Corey Martin, head of entertainment finance at Granderson Des Rochers, LLP.

Artist and Union Outcry

Since the proposed takeover was announced, many prominent figures have publicly opposed it. A Hollywood petition to block the deal has gained over 4,000 signatures, including support from stars such as Robert De Niro, Joaquin Phoenix, and Florence Pugh. Other actors, like Mark Ruffalo and Ben Stiller, have expressed concerns that the merger could hinder the creation of new television series. Although this public opposition is growing, it’s unlikely to directly impact the deal or change the mind of Paramount Skydance CEO David Ellison, as it doesn’t carry any legal authority.

The biggest opposition to the deal might come from Hollywood’s unions. The merger is predicted to cause thousands of job losses – Oracle boss Larry Ellison has said they’ve already found $6 billion in areas to cut. So far, the Writers Guild of America (WGA) and the Teamsters union have spoken out about how this merger could harm their members. In a statement on April 23rd, the WGA called the merger a “disaster” for writers, the entertainment industry, and the public, and asked California Attorney General Rob Bonta to thoroughly investigate the deal and ensure it follows the law. (See more details below).

On March 12th, Teamsters president Sean O’Brien publicly asked the Department of Justice to investigate the proposed merger, stating they should prevent deals that reduce competition and negatively impact workers. He emphasized that Paramount and Warner Bros. Discovery must commit to maintaining domestic production and fair labor practices before the merger can proceed. While SAG-AFTRA, the Directors Guild of America, and the Producers Guild of America haven’t officially commented, they previously expressed worries about industry consolidation when Netflix was considered the likely buyer in February.

Bedoya explains that unions could potentially challenge this merger in court, citing antitrust laws, but Martin doubts they will. He believes these groups won’t unite to file a lawsuit, and even if they did, they likely wouldn’t have a legal basis to succeed. Martin suggests their main goal is simply to guarantee that future productions from the merged company remain unionized.

Federal Intervention

With a price of $111 billion, the proposed merger will likely face scrutiny from the Department of Justice and the Federal Trade Commission, which could potentially prevent Paramount from buying Warner Bros. Although there are valid worries that this deal could reduce competition in the entertainment industry, the current administration has generally supported large mergers. There’s no indication this trend will change. Furthermore, David Ellison has successfully navigated regulatory approvals with this administration before, having completed the Skydance-Paramount merger in 2025. Ellison’s close personal relationship with Donald Trump – including attending private dinners and UFC events together – may also help the deal move forward.

There’s a possibility, though not a certainty, that if Democrats control both the House and Senate after 2027, they might pass laws to reverse the merger. Senators Chris Murphy and Ruben Gallego have already expressed interest in doing so. Experts point to a recent Democratic proposal to break up the meatpacking industry – aimed at lowering consumer costs – as a similar example of this type of action.

European Approval

Once Paramount receives approval from U.S. antitrust regulators, it also needs the go-ahead from competition authorities in the U.K. and the European Union to operate in those regions. Historically, these agencies have usually followed the lead of U.S. decisions on mergers. However, current tensions in U.S.-European relations might lead them to act independently this time.

The U.K.’s competition regulator, the Competitions and Markets Authority, stated that strong competition is vital for ensuring U.K. viewers have access to high-quality movies and TV shows at reasonable prices. Given the significant economic contribution of the film and television industries, the authority is investigating whether agreements between studios could stifle competition. They plan to begin a first-phase investigation soon. While the European Commission hasn’t officially commented, reports from April 29 indicate they are not expected to strongly oppose these deals.

International Investors

To fund its acquisition of Warner Bros., Paramount received a $24 billion investment from three Middle Eastern countries – Saudi Arabia, Qatar, and the United Arab Emirates. This investment could lead to a review by national security officials, potentially delaying the deal. However, experts believe intervention is unlikely because the Trump administration has generally maintained positive relations with these countries, and as long as the financial details are open and clear.

Bedoya suggests these investment funds are more likely to withdraw their money because of concerns about the deal’s weak foundations. Given the ongoing conflict in Iran and the resulting financial difficulties for these countries – as seen with Saudi Arabia recently reducing funding for LIV Golf – they may be hesitant to invest $24 billion in a merger with an uncertain outcome.

The Best Bet: State Attorneys General

Even if federal regulators approve the merger between Paramount and Warner Bros., it could still be blocked by lawsuits from state attorneys general. These officials could challenge the deal for various reasons, including concerns about higher prices for streaming services or potential job losses.

Right now, everyone is watching California Attorney General Rob Bonta, as his state stands to be most affected if future job opportunities are limited. However, he might receive support from other state attorneys general as well. According to one expert, the question isn’t if Bonta will sue, but how many of his colleagues will join the lawsuit. While Paramount could potentially win all challenges or make enough changes to satisfy the attorneys general, recent successful lawsuits – like those that temporarily blocked the Nexstar-Tegna merger and challenged Live Nation Ticketmaster’s monopoly – suggest this could be a significant hurdle for the company.

What’s Next?

Martin thinks Paramount has already cleared the biggest hurdle in the merger process by getting Warner Bros. shareholders on board. However, Bedoya believes the real challenges are still ahead. He doesn’t think a single lawsuit will necessarily block the deal, but a strong legal fight combined with opposition from unions and international groups could ultimately be enough to stop it. He explains that there are multiple ways the merger could be challenged, and each one represents a potential roadblock.

2026-04-30 19:55