Paramount-WBD antitrust challenge may hold up more media deals

Long-awaited media M&A appeared to be finally getting off the ground in recent months.

But the delay of Paramount Skydance’s $110 billion proposed acquisition of Warner Bros. Discovery has industry insiders now citing a chill on mergers and acquisitions.

Last month, Paramount agreed to put its tie-up with WBD on hold until as late as June 2027, roughly nine months past its planned closing, while an antitrust challenge brought by a group of state attorneys general heads to trial. The deal had already won approval by global regulators, including from the Antitrust Division of the U.S. Department of Justice.

Media executives and onlookers say the threat of increased scrutiny by state regulators, as well as a monthslong process before the dust settles, could put more than just Paramount’s megamerger on ice.

“It feels like the landscape has shifted significantly in the last few weeks around larger deals and combinations,” said Jonathan Miller, a media industry veteran who currently serves as CEO of Integrated Media, which owns a portfolio of media and creator ventures.

“I think we’re going to see a lull in deals,” Miller said.

What once felt like a regulatory environment welcoming of mergers during President Donald Trump’s second term now feels hampered by the threat that states could take up the regulatory baton.

U.S. companies have inked just over 7,500 deals so far this year through Aug. 20, up from 7,015 during the same period last year, according to data provider Dealogic. Collective deal value is up considerably, too, as more megadeals get across the finish line.

Media companies have been raring for some time to be part of the action as they seek to cut costs and add scale to their businesses amid the bleed of pay TV subscribers.

Besides Paramount’s takeover of WBD — which itself came months after David Ellison’s Skydance completed its acquisition of Paramount — the industry has seen announcements of combinations, spinoffs and partnerships accounting for tens of billions of dollars in media market cap.

Fox Corp. plans to acquire Roku for $22 billion. Comcast, after separating out its portfolio of cable networks into Versant, is now planning to spin off NBCUniversal — which also recently formed a partnership between its Peacock streaming service and YouTube. Netflix has also come to the negotiating table after long vowing to build rather than buy.

The future of Fox and Roku’s marriage was called into question in a recent analyst note, despite the transaction having relatively fewer antitrust concerns than Paramount-WBD. The deal got a lukewarm reception from investors in June but is nonetheless considered a strategic pivot for Fox into streaming distribution.

Bernstein analysts noted what could be a “regulatory timing risk, particularly given the ongoing PSKY-WBD process.”

“While we do not view [the] Roku transaction as creating meaningful horizontal or vertical concentration concerns, current regulatory developments for [the] PSKY-WBD process indicate that transaction timing can be unpredictable even when the underlying antitrust arguments appear relatively weak,” according to the Bernstein analysts’ note.

The Fox-Roku deal is expected to close in the first half of 2027.

A similar dynamic is playing out with broadcast station owners hungry for consolidation, CNBC previously reported. Nexstar Media Group’s $6.2 billion acquisition of Tegna was announced in August 2025 and formally closed in March, but a group of state attorneys general sued to unwind the agreement. A trial is slated for next year.

Meanwhile, Comcast’s planned separation of NBCUniversal — expected to be completed next summer — swiftly raised hopes of more M&A to come when the move was announced in June.

Both companies are well positioned and flexible to do deals once they trade as standalone entities. NBCUniversal will include the Universal movie studio, Peacock streaming business, NBC broadcast network and related assets, while Comcast will house the Xfinity-branded services including broadband and mobile.

Executives for both NBCUniversal and Comcast have previously thrown cold water on the idea that the separation was for the purpose of dealmaking, but each company will undoubtedly have more avenues for M&A once the spinoff is complete.

As NBCUniversal prepares for its future as a standalone company, internal discussions have revolved around partnerships, bundles and other similar opportunities with media and tech companies, people familiar with the matter said. M&A has not been a topic of discussion for the near term, although minority-stake opportunities could be on the table, according to two of the people, who spoke on the condition of anonymity to discuss internal strategy.

Incoming Comcast CEO Michael Angelakis — known in the industry as a dealmaker — said during an investor call he believed Comcast had the scale to compete, but he also didn’t dismiss future M&A. While a much-speculated combination with cable peer Charter Communications doesn’t appear to be in the cards, other opportunities in the broadband and tech industry could be attractive, one of the people said.

Yet executives at both of the soon-to-be separated companies are likely to avoid M&A discussions until Paramount-WBD’s process is resolved, some of the people familiar said, taking that result as an indication of what deals may or may not be doable in a more scrutinous environment.

Comcast and NBCUniversal leadership have become less inclined to consider near-term dealmaking with such potential regulatory pressure, according to those people.

For years, NBCUniversal, like Warner Bros. Discovery, has been frequently floated as a potential takeover target. The two companies have similar portfolios made up of linear TV, film production and streaming.

In the event Paramount’s marriage with WBD gets blocked by the state AGs, NBCU could look less appealing to some would-be suitors.

A stall on media M&A could spur an uptick in partnerships and bundles, Integrated Media’s Miller said.

NBCUniversal’s Peacock deal with YouTube to effectively ingest content from NBCU into YouTube for Premium subscribers could be a model for one of those options. YouTube has long topped Nielsen’s streaming viewership list, and deals that see more of traditional media’s content embedded into the tech platform could become more commonplace.

Many in the industry have argued that creating bundles between various streaming services is the most consumer-friendly and profit-driving alternative to the current decentralized ecosystem. Peacock and Apple TV offer bundled plans, Disney offers a bundle of its various streaming services — Disney+, ESPN and Hulu — and Fox One and ESPN offer a separate bundle.

NBCUniversal has had conversations with various media players about potential bundles and content partnerships similar to the recently announced YouTube deal, according to one of the people familiar with the matter.

In place of M&A, media companies are also likely to focus more on deals with content creators and for intellectual property to bulk up their platforms. Media companies have been gravitating toward adding this content — along with short-form programming — to their platforms in a bid to attract younger viewers.

One thing is certain: Ellison’s Paramount won’t be merged with WBD as easily as it planned.

Both Ellison and WBD CEO David Zaslav recently voiced their confidence in the deal, but the delay will be costly for Paramount. Under the terms of its agreement, Paramount will owe WBD shareholders a so-called ticking fee the longer the deal is delayed, beginning Sept. 30. The fee could amount to roughly $650 million in cash value per quarter.

Paramount last week filed to compel the suing states to post a $1.88 billion bond that it says would cover the ticking fee as well as other costs associated with the delay. And in recent days, The New York Times reported Paramount and California Attorney General Rob Bonta, who is leading the charge against the tie-up, would begin preliminary settlement talks — which were then swiftly called off, according to the paper.

Regardless, the economics of the deal look very different if it’s completed in June of next year versus September of this year. The threat of similar holdups for other deals could infiltrate deal discussions and shift financial terms.

“The market-definition fight just got a price tag. A March 2027 trial date turns what had been an abstract antitrust debate into a potential billion-dollar delay cost before the court even rules,” said Mike Proulx, vice president and research director at Forrester. “The deal may still close, but the clean-close scenario is now gone.

“Paramount can still argue that the states are defining the market too narrowly,” Proulx said, “but proving that point just became much more expensive.”

Disclosure: Versant Media Group is the parent company of CNBC.