In an all-company memo, Paramount CEO David Ellison sought to express confidence that the $111 billion acquisition of Warner Bros. Discovery will eventually cross the finish line.
On Friday, Paramount announced an agreement to put its deal with WBD on hold for at least several months as it defends itself in an antitrust lawsuit brought by 12 state attorneys general seeking to block the deal. Paramount and WBD’s agreement to suspend the merger pending the conclusion of the trial means the merger may not be completed until 2027.
“We remain very confident that this transaction will not raise any legal issues and we intend to complete the transaction and integrate our companies,” Ellison wrote in the memo. The memo, a copy of which was obtained by Variety, was sent around 10 a.m. ET on Monday.
“We believe this is the right path because the facts and the law are on our side and a full hearing will show why the plaintiffs’ claims will not prevail,” Ellison said of the decision to agree to a freeze on the merger pending trial.
Ellison told employees that Paramount and the state Board of Supervisors will discuss a potential trial date this week and will provide an update to the court by Friday, July 31. States plan to seek a trial date in 2027, but the Paramount Skydance team is expected to seek a fall 2026 date.
“We know this additional uncertainty is difficult, but we want to thank everyone for their continued patience, dedication, and collective contributions,” Ellison wrote in the memo. “For now, it’s business as usual. Paramount and WBD are separate, independently operated companies, and we remain focused on serving our audiences, supporting each other and executing our strategy.”
Despite the setback, Ellison ended his note with an uplifting message, writing, “Let’s go!”
From the beginning, Paramount has maintained that there were no antitrust issues with the merger with WBD. The company said regulators and governments representing 65 jurisdictions “have either approved or chosen not to object to the transaction on competition and/or foreign direct investment grounds,” as Ellison wrote in the memo. This includes the U.S. Department of Justice’s approval in June, over the objections of career lawyers who were reviewing the report.
Paramount has raised $24 billion from sovereign wealth funds in Saudi Arabia, Qatar and the United Arab Emirates. The three Middle East funds will hold a combined 38.5% stake in Paramount and Warner Bros., Paramount said. Paramount previously said a CFIUS review was not warranted because foreign investors supporting the WBD bid would not have board seats or voting rights.
Read Ellison’s full memo:
team,
We are aware that there has been a lot of press coverage regarding our company in recent weeks, and we recognize that references to court proceedings, delays and the timing of the transaction may create questions and uncertainty. We would therefore like to share an update on the litigation related to our proposed deal with Warner Bros. Discovery.
I’m sure many of you will be watching this deal closely as it unfolds, but here’s a quick summary. Over the past several months, our management team and legal partners have worked closely with antitrust and competition authorities around the world. As a result, regulators and governments representing 65 jurisdictions, including the European Commission, Australia, China, the United States, Germany, France, Spain, Canada and South Korea, either approved the transaction or chose not to challenge it on competition or foreign direct investment grounds.
These authorizations reflect both fact and law. This combination is fully consistent with antitrust laws and will create stronger, more competitive media companies with the scale to invest more deeply in storytelling, expand consumer choice, and compete more effectively in a rapidly changing entertainment landscape. Just as importantly, it will create more opportunities for creators by allowing the combined company to increase investment in content, take creative risks, and accelerate technology that delivers greater choice and better experiences to audiences everywhere.
The deal could have been completed within the next few weeks had it not been for a lawsuit filed by California’s attorney general, along with 11 other attorneys general, and another lawsuit from the Writers Guild of America (WGA) seeking to block the merger.
To be clear, we strongly believe that this transaction does not create any legal issues and we intend to complete the transaction and integrate our companies. To this end, Paramount, WBD, the state attorney general, and WGA have agreed not to proceed with a court-ordered preliminary injunction hearing scheduled for August 3. Instead, the parties will proceed directly to a trial on the merits. We believe this is the right path. Because the facts and the law are on our side, and a full trial will reveal why the plaintiff’s case will not prevail.
The parties are expected to discuss a potential trial date this week and provide an update to the court next Friday. The timing of the trial will be decided after the court considers these arguments and issues a schedule.
In the meantime, unless further progress is made, the completion of the transaction will remain suspended. Our team will continue to plan under the guidance of the Integrated Management Office (IMO) and in consultation with legal advisors. Given the revised timeline, IMO is likely to adjust the pace and order of its work in the coming weeks to reflect the revised timeline. Those involved in the integration planning effort will hear directly from Tony Driscoll, Paramount’s head of IMO. We also recommend visiting Integration Hub for the latest updates, FAQs, and other resources.
We know this additional uncertainty is a challenge, but we want to thank you for your continued patience, dedication, and collective contribution. For now, we are operating as usual. Paramount and WBD are independently operated and separate companies with a continued focus on serving our audiences, supporting each other and executing our strategies. We had a successful first year as a new Paramount. It’s all thanks to you. I’m very proud of everything this team has accomplished.
As always, we strive to be as direct and transparent as possible. If we have meaningful and verified information to share, we will let you know. Until then, please know that we remain confident in our position and strongly believe that this transaction is pro-competitive and will deliver meaningful benefits to consumers, creators and the broader entertainment industry.
Thank you again for all you do for our company, our viewers, and each other. I hope you have a great summer and look forward to what we can achieve together in the coming months and years.
Let’s go!
david
