Paramount-Skydance Warner Bros. Discovery Merger Freeze: Terms, Ticking Fees, and Legal Timeline

Key Financial Stakes of the Freeze

Deal value. Paramount Skydance's all-cash offer values WBD at approximately $30 per share, or roughly $111 billion (reported figures range from $81 billion to $111 billion depending on debt assumptions) .

Breakup fee. If the deal fails to close because Paramount walks or regulatory conditions are not met, Paramount has structured a $2.8 billion termination fee to be paid to WBD . In earlier bidding rounds, Paramount also offered a $5 billion reverse breakup fee should it be unable to complete the deal, but the $2.8 billion figure is the most consistently cited in official Paramount materials .

'Ticking fee' delay compensation. Paramount included a $0.25 per share per quarter 'ticking fee' for WBD shareholders, payable for each quarter the transaction remains unclosed beyond December 31, 2026 — some reports say September 30, 2026 . Because the court freeze pushes closing past those dates, this fee will begin accruing during the delay. This is a quarterly, not daily, compensation. Multiple news outlets have estimated this works out to approximately $7 million per day once it begins .

The Coalition of 12 State Attorneys General

On July 13, 2026, a coalition of 12 state attorneys general — led by California Attorney General Rob Bonta — filed a federal antitrust lawsuit in the Northern District of California to permanently block the merger . The states argue that combining Paramount and Warner Bros. Discovery would "extinguish competition" in the film and TV industry and harm consumers .

The 12 states are: California, Connecticut, Delaware, Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Washington, and the District of Columbia . Oregon had previously sought a separate 60-day pause and document production order related to Paramount's lobbying of federal regulators .

The Federal-State Split with the DOJ

On June 12, 2026, the U.S. Department of Justice Antitrust Division formally closed its eight-month investigation and cleared the transaction, stating that based on the evidence it "determined that the transaction is not likely to result in harm to competition or American consumers" . The DOJ reviewed the deal across several dimensions including streaming video (SVOD) markets, traditional television, and content creation .

The state AGs' lawsuit therefore represents a sharp federal–state split: the DOJ approved the deal, but the states argue it violates the same federal antitrust laws. The states are not bound by the DOJ's conclusion and are pursuing their own enforcement action in federal court .

Key Deadlines and What Comes Next

• June 2027 — The drop-dead date in the merger agreement. If the deal has not closed by then, the agreement expires and either party can walk away .
• Five days after final court ruling — If the federal court resolves the state antitrust case before June 2027, the deal can close five days later .
• Ongoing procedural steps. The TRO granted July 20 initially paused the deal through August 3; that was superseded by the longer consent freeze on July 24 . The next major procedural deadline is the court's scheduling of a preliminary injunction hearing, which has not yet been set.

In short, the merger is frozen by a binding court-approved agreement until either the states' lawsuit is resolved (via trial, settlement, or dismissal) or the deal's own contractual deadline of June 2027 lapses — with ticking fees accruing to WBD shareholders and a $2.8 billion breakup fee standing as the main financial backstops.