Paramount will have to pay Warner 1.2 billion even if the merger never happens.

The Paramount-Warner merger has suffered a major setback from which it may never recover. After 12 US states joined together to sue over the merger, the judge overseeing the case decided to delay proceedings for two weeks to review the case and determine how to proceed. And now she has made a decision. That decision is that it will go to trial, which will begin in March 2027.

A deal that doesn’t seem like it’s going to end well

This ruins Paramount’s plans, which was hoping to complete the merger with Warner Bros. before September 30. For each day after October 1 that the merger remains incomplete, it will have to pay shareholders $7 million. That means that, by the day of the trial, it will have to pay shareholders 1.2 billion dollars, whether the merger happens or not, and that’s assuming the trial ends on the first day. That seems unlikely, since it will drag on for months.

For its part, Paramount is confident it won’t run into any problems. Declaring that “the case against us has no basis in reality, economics, or antitrust law. We will continue to vigorously defend the transaction and remain committed to closing it as soon as possible so that the benefits for the creative community and consumers can be achieved,” they are convinced that they will be able to come through unscathed.

Although we’ll have to wait to see how this situation is resolved, at the very least Paramount is going to have to pay a lot more money than it expected to complete the merger. And although it was hoping to close it before the end of the summer, it seems that will now be impossible even before the end of the year.