After initially circling July 16 as the earliest date it could close its $110 billion deal to acquire Warner Bros. Discovery, Paramount has now pushed that date back as it faces regulatory pressure on multiple fronts.
According to a report by Jody Godoy in Reuters, Paramount will not close its deal with Warner Bros. Discovery until July 22 at the earliest, noting the amended timeline in Oregon court on Wednesday. Oregon is one of many states taking or considering a regulatory review of the transaction. Oregon attorney general Dan Rayfield is “probing whether the Justice Department’s approval was ‘the product of a corrupt bargain,'” according to CNN’s Brian Stelter. Prior reports indicate that career DOJ staffers opposed the deal, but had no opportunity to recommend a lawsuit before top officials approved the transaction in June. An Oregon judge will hear arguments for the case on Monday.
Additionally, California attorney general Rob Bonta is actively investigating the transaction, and could file a lawsuit following an antitrust review.
The state-level investigations are parallel to separate efforts for the deal to attain regulatory approval abroad. The European Commission, the body which handles antitrust matters for the European Union, is reportedly likely to approve the deal if Paramount exits its joint distribution venture with Universal in Europe. Meanwhile, the United Kingdom is also weighing an intervention in the deal.
July 16 was always an optimistic date for the transaction to close, as is July 22 for that matter. Realistically, the important date for the merger is September 30, the final day of the third quarter. Should the transaction not be finalized by then, Paramount will be forced to pay Warner Bros. Discovery shareholders a daily “ticking fee” that amounts to about $7 million per day ($0.25 per share).
Despite the scrutiny on multiple fronts, Paramount is steadfast that the merger should pass regulatory muster.
“We continue to engage constructively with regulators, including State Attorneys General, and are prepared to address any legitimate antitrust issues. We are confident this transaction raises no such concerns,” a Paramount spokesperson told CNN. “Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws.”
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.