New York, June 5, 2026, 18:05 (EDT)
- Warner Bros. Discovery last traded at $26.24, down 2.8%. That’s about 15% under Paramount’s $31-a-share cash bid.
- California, New York and several other states are getting ready to sue to stop the Paramount Skydance deal, Reuters said.
- The main things to watch next are moves by U.S. states, a decision from the Justice Department, and an expected EU ruling before July 7.
Warner Bros. Discovery shares slipped Friday after word that California, New York and other states are getting ready to sue to stop Paramount Skydance’s $110 billion deal. Reuters said the states plan to file in the coming weeks. WBD lost 3.6% Friday afternoon after the news. Paramount shares also extended their slide.
WBD traded at $26.24, off 2.8%, after hitting a session low of $25.915. About 49.4 million shares changed hands. Paramount Skydance slipped 4.2% to $10.22.
Investors are selling the stock below the $31-a-share in cash that Paramount agreed to, and the gap is nearly 15%. That discount signals execution risk—investors want protection in case the deal faces delays, revisions, or a challenge. Back in February, Paramount and WBD put WBD’s equity value at $81 billion and its enterprise value, with debt, at $110 billion.
California Attorney General Rob Bonta told Reuters his office is close to a decision on a possible lawsuit. “There’s not a lot of time left before we will need to act if that’s what we decide to do,” Bonta said. The antitrust question has become the central issue for the deal. Reuters
Bonta said California has “a central role” in guarding Hollywood jobs as the Paramount-Warner merger moves ahead. Paramount Chief Legal Officer Makan Delrahim said the firm is “always prepared to remedy legitimate and articulated violations of the antitrust laws,” but said the deal doesn’t have any. Reuters
Paramount says the deal would help make a stronger player in streaming and movies, not a weaker one. The company has said it will keep both studios open and put out at least 30 theatrical releases a year once the merger is done, trying to address concerns from actors, writers and theater owners.
A lawsuit on its own won’t immediately stop the deal, though it could delay closing by months if a judge puts things on hold during the court process. Paramount is set to pay WBD shareholders a “ticking fee” — that’s an extra 25 cents per share per quarter once the deal goes past Sept. 30 without closing. Reuters
European regulators still need to weigh in. Paramount asked for EU antitrust clearance this week. The European Commission will decide by July 7 if the takeover goes ahead, requires concessions, or faces a broader probe.
Big competition is in play. Merging Warner Bros. and Paramount Pictures would cut Hollywood’s “big five” studios down to four, just as Netflix holds onto streaming size and Disney keeps its lead at the box office. Reuters
Friday’s drop followed earlier warnings from analysts about the issue. Back in April, as WBD shareholders cleared the merger, PP Foresight’s Paolo Pescatore said management had “a twofold challenge”—getting the deal through and showing long-term value without spurring more talk about executive pay. Forrester’s Mike Proulx said at the time that “the real regulatory pressure sits overseas,” with European regulators watching market structure. Reuters
WBD’s operating picture is still messy. First-quarter revenue came in at $8.9 billion, down 3% when currency moves are stripped out. Free cash flow was negative $476 million. Net debt finished March at $30.1 billion. Net leverage stood at 3.4 times. Global Linear Networks continued to contract.
WBD has its annual meeting coming up June 9 at 10 a.m. ET. Investors won’t just be listening for the usual governance updates—they’re looking for any change in language on regulatory timing.
The risk cuts both ways. States could sue and get an injunction, which might send WBD’s shares down toward a standalone level that reflects its debt, struggling linear TV, and negative free cash flow. If regulators give the go-ahead, or if the state lawsuit doesn’t stop the deal, the gap to Paramount’s $31 cash price could tighten fast. Right now, the stock is moving on courtroom dates rather than media earnings.
