CNBC reported that Paramount Skydance Corporation (NASDAQ:PSKY) CEO David Ellison has cleared regulatory approval in 68 jurisdictions for his $110 billion bid to acquire Warner Bros. Discovery, Inc. (NASDAQ:WBD), but a lawsuit from 12 state attorneys general remains the final obstacle.
California Attorney General Rob Bonta, who leads the states’ case, canceled a planned settlement meeting with Ellison, noting a “lack of good faith.” Paramount said it remains “hopeful” and denied being the source of leaks about the talks. Media veteran Tom Rogers said California’s home constituency is “overwhelmingly against the transaction,” reducing the state’s incentive to settle. Paramount faces a ticking fee that could reach roughly $650 million per quarter starting September 30 and asked a court to force the states to post a $1.88 billion bond.
Bull Case
The deal already holds broad global regulatory approval, which strengthens Paramount Skydance Corporation (NASDAQ:PSKY)’s position in the remaining state dispute. With clearance from roughly 68 jurisdictions worldwide, the state antitrust lawsuits represent the main remaining obstacle rather than a broad regulatory challenge. This gives Paramount a strong basis to argue that the transaction has already withstood extensive regulatory scrutiny.
For Warner Bros. Discovery, Inc. (NASDAQ:WBD) shareholders, California Governor Gavin Newsom is sending a clear signal that he prefers a settlement over a prolonged court battle. If Paramount can satisfy California and the other states, WBD shareholders can finally receive the agreed payment instead of remaining stuck in legal limbo. That makes a negotiated resolution potentially attractive to shareholders who have faced prolonged uncertainty around the transaction.
Paramount has also shown flexibility rather than simply defending the deal’s original terms. The company has acknowledged that it is considering structural changes to settle the lawsuits. It shows management is willing to make concessions to get the transaction completed. That flexibility could improve the chances of reaching a settlement without requiring the companies to wait for a lengthy court process.
For Paramount, a settlement could avoid the high costs of prolonged litigation and reduce the financial burden associated with delaying the closing. The firm faces quarterly payments to Warner Bros shareholders if the deal closes after the September 30 deadline, making a negotiated resolution increasingly valuable. Settling the disputes would reduce uncertainty, limit additional costs, and allow Paramount to move more quickly toward realizing the strategic benefits of combining the two companies.
Bear Case
Settlement talks are not just stalled; they are actively deteriorating. Bonta’s decision to cancel a scheduled meeting and cite a “lack of good faith” is a more serious signal than a simple delay. It shows real distrust has built up between the two sides rather than just a slow negotiating process.
California’s own political incentives point away from a quick settlement. Rogers said there is little reason for the state AGs to settle given that their “home constituency” opposes the deal, meaning the political pressure Bonta faces at home may outweigh any pressure to resolve the case quickly, regardless of the deal’s global regulatory record.
The cost of delay is real, quantified, and getting more expensive by the quarter. Paramount Skydance Corporation (NASDAQ:PSKY) faces a roughly $650 million quarterly ticking fee to WBD shareholders starting September 30, on top of a $110 billion price tag, CNBC reported, meaning every additional quarter without resolution adds a meaningful, guaranteed cost regardless of the eventual outcome.
Warner Bros. Discovery, Inc. (NASDAQ:WBD) itself is stuck, unable to pursue its own strategic options while the deal remains unresolved. CNBC described the company as being left “in limbo,” with CEO David Zaslav focused on “trying to drive the value of the company” rather than pursuing the kind of bundling or distribution deals other media companies, like NBCUniversal’s Peacock, have struck during the same period.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s database shows Paramount Skydance Corporation (NASDAQ:PSKY) was held by 38 hedge funds in the second quarter of 2026, up from 30 in the first quarter, with total holdings valued at $368.8 million. Warner Bros. Discovery, Inc. (NASDAQ:WBD), the target of Paramount’s bid, was far more widely held, with 101 funds owning $11.58 billion, up from 94 funds. Among other media rivals, Netflix was held by 121 funds worth $9.95 billion, down from 144 last quarter; Disney by 98 funds worth $5.73 billion, down from 119, and Comcast by 82 funds worth $3.86 billion, up from 78. Warner Bros rising hedge fund interest stands out against Netflix’s and Disney’s declining fund counts over the same period.
Conclusion
Paramount has cleared most of the global regulatory hurdles, but California remains a major obstacle to closing the Warner Bros. Discovery deal. A settlement could unlock the transaction and reduce the growing costs of delay, including the $650 million quarterly ticking fee. However, deteriorating negotiations and political resistance make a quick resolution far from certain. For investors, the deal remains a high-stakes regulatory bet where every delay increases the financial cost and uncertainty.
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