Paramount is paying $31 a share, cash, for Warner Bros. Discovery: $81 billion in equity value, $110 billion once you count the debt. The prize is HBO Max, Warner Bros. Pictures, DC Studios and WBD’s cable networks, the assets Paramount was fighting Netflix for since December. Both boards signed off on the definitive merger agreement, with WBD shareholder approval expected in early spring.
The Justice Department cleared the deal months ago. On July 20, a federal judge in California froze it anyway. Twelve states led by California won a 14-day restraining order, arguing the combined studio would control too much of wide-release theatrical distribution and basic cable licensing. A hearing on a preliminary injunction is set for August 3.
Sound familiar? Nexstar’s buyout of Tegna cleared federal antitrust review too, then state attorneys general challenged it anyway. State attorneys general, not the DOJ, are becoming the real closing condition on national media mergers.
That math matters for who’s exposed here. The Ellison family and RedBird Capital put in $47 billion of equity at $16.02 a share, backstopped by $54 billion in bank debt, none of it priced for a second regulatory gauntlet after federal sign-off. WBD shareholders start collecting a $0.25-per-share quarterly ticking fee if the deal isn’t closed by September 30, so every week of delay costs Paramount real money, not just time.
August 3 decides whether $110 billion in enterprise value stays parked or starts moving again.
Diana Kowalski