Warner Bros Deal Faces California Antitrust Hurdle

Warner Bros. Discovery remains in limbo regarding its $110 billion acquisition by Paramount Skydance. On 6 September, CNBC reported that Paramount Skydance CEO David Ellison secured regulatory clearance in 68 jurisdictions worldwide. However, a lawsuit brought by 12 state attorneys general stands as the final barrier to closing the deal.

California Attorney General Rob Bonta, who heads the state coalition, canceled a planned settlement meeting with Ellison and cited a lack of good faith. Media veteran Tom Rogers stated that California voters strongly oppose the transaction, which limits the state's interest in settling. Paramount stated that it remains hopeful, denied leaking negotiation details, and asked a court to order the states to post a $1.88 billion bond.

Delays carry direct financial penalties under the transaction terms. Paramount Skydance must pay Warner Bros. Discovery shareholders a ticking fee of roughly $650 million per quarter starting on 30 September if the deal does not close. While California Governor Gavin Newsom has signaled support for a settlement, the deadlock currently prevents Warner Bros. Discovery CEO David Zaslav from entering new distribution or bundling partnerships.

Hedge fund backing for Warner Bros. Discovery rose during the second quarter of 2026. Data shows 101 hedge funds held $11.58 billion in Warner Bros. Discovery shares, up from 94 funds in the prior quarter. In comparison, 38 hedge funds held $368.8 million in Paramount Skydance, while fund counts declined at rivals Netflix and Disney.