A federal judge has paused Paramount Skydance’s $111bn acquisition of Warner Bros. Discovery after twelve state attorneys general filed suit, halting a deal that had already cleared shareholders and the Department of Justice.
The suit was filed on 13 July. Paramount won the company in February with an offer of $31 a share in cash for the whole business, after Netflix declined to raise its bid.
How did Paramount win?
Warner Bros. Discovery announced in October that it was exploring a sale. By December it had entered exclusive negotiations with Netflix on a cash-and-stock offer for its studio and streaming operations valued at about $72bn, or roughly $82.7bn including debt, excluding the cable networks.
Paramount then launched a hostile bid for the entire company and raised it repeatedly, reaching $31 a share and agreeing to pay the $2.8bn break fee Warner owed Netflix. The Warner board declared it superior on 26 February. Netflix had four business days to match and walked away.
| Stage | Date |
|---|---|
| Sale process opened | October 2025 |
| Netflix agreement | December 2025 |
| Paramount declared superior | 26 February 2026 |
| Shareholders approve | April 2026 |
| DOJ approval | June 2026 |
| Court pause | July 2026 |
What is happening with the Warner Bros. Discovery sale?
Paramount Skydance agreed to acquire Warner Bros. Discovery in February 2026 for $31 a share in cash, valuing the transaction at approximately $111bn including debt and covering the entire company, including the cable networks CNN, TBS and TNT. The offer displaced a December 2025 agreement under which Netflix would have bought Warner’s studio and streaming operations for about $82.7bn including debt. Netflix declined to match the revised Paramount bid and withdrew in February 2026. Warner shareholders approved the Paramount transaction in April 2026 and the United States Department of Justice approved it in June. On 13 July 2026 a coalition of twelve state attorneys general filed suit against the deal, and a federal judge subsequently paused it. Paramount’s bid is backed in part by sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.
Why was the deal contested?
The Warner board had rejected earlier Paramount approaches on grounds of debt and financing risk, noting that the offer would leave the combined company carrying $87bn in debt.
It also raised concerns about the investors behind the bid, which include sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, alongside Jared Kushner’s Affinity Partners.
Paramount argued the opposite case publicly, telling regulators that a Netflix purchase would concentrate power over streaming and pay television, and pressed that argument with authorities in the United Kingdom and European Union as well as Washington.
What is at stake?
Paramount’s offer covers all of Warner’s assets, including the cable networks Netflix did not want: CNN, TBS and TNT, alongside the film studio, HBO and the streaming service.
Warner Bros. is a century-old studio. Its sale in either direction would reduce the number of major Hollywood studios, which is the substance of the states’ objection.
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Sources for this report
The Redline News Desk
The Redline News desk files and edits world reporting. Every story carries the sources it was built from, and corrections are published on the story itself.
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