California Attorney General Rob Bonta is pushing back on the deal, and he is not being subtle about it. He has said any settlement requires "robust structural remedies" in pay TV and film studios, meaning the combined company would need to sell off some serious pieces.
Settlement talks recently broke down, but analysts think a deal is still possible. "This is as good a deal as Warner Bros. Discovery's going to get," said Tom Rogers, an industry analyst, noting that walking away entirely is a hard sell. The deal also has a firm timeline, with a deadline set for Aug. 5.
Meanwhile, Warner Bros. Discovery keeps watching the clock while it waits. The company has been in limbo for over a year, watching its options shift from standalone strategy to merger talks and now to this delayed acquisition by Paramount Skydance. CEO David Zaslav said he has been focused on "trying to drive the value of the company" during the wait.
At the center of this is a streaming math problem. The company projects its global streaming customer base will top 150 million by the close of the year. That sounds good on its own, but the real challenge is linear TV.
The merger agreement lets Warner Bros. Discovery keep operating independently until the deal closes, so it can keep striking licensing deals, which it has done aggressively.
HBO shows like "Sex and the City" have already gone to Netflix. The company's CFO, Gunnar Wiedenfels, said this demand has been strong, calling it "very healthy." This content licensing strategy is a big deal because last quarter's results show that film and linear TV studios weighed on earnings while ad-supported streaming grew.
The merger agreement includes rules that allow Warner Bros. Discovery to operate on its own but prevent it from doing big deals. So the company cannot buy its way into growth or sell off pieces to raise cash without the buyer's permission.
That could change. Bonta, who is leading the antitrust fight, said any settlement would require "robust structural remedies" in pay TV and film.
Waiting on a merger decision feels familiar, so grab the free Always Be Buying E-Book to build wealth while you watch.
New Line Cinema, the studio behind Lord of the Rings, Final Destination, and Mortal Kombat, is almost certainly a likely target, given its iconic catalog and bidders waiting to jump.
Pay TV networks like TNT or HGTV could also be at risk. Even if the deal goes through, the combined HBO Max and Paramount+ service would face a streaming future that rewards scale. Analyst Robert Fishman argues that the merged company would fare far better against Disney, Netflix, Amazon, and YouTube, while a standalone platform "unlikely to compete long term" is the likely outcome if the deal falls apart.
The delay in the merger means Warner Bros. Discovery is stuck in a strange in-between place. It can't do big mergers while the deal is pending, but it can still license content, which explains the recent push to put shows on Netflix.
Tom Rogers says Warner Bros. Discovery has reached the best deal it's going to get, and walking away would be painful, noting "plenty of incentive" to make it work.
The debt is one issue the company faces. It has $110 billion in debt to manage, and uncertainty around the deal is not helping anyone. TV networks like TNT and HGTV could be sold, and the film studio New Line could attract bidders.
The legal push is coming from state attorneys general, not just Washington. Bonta has taken legal action to prevent the merger, signaling that states may keep stepping in on antitrust cases federal regulators are slow to pursue.
If the merger clears and the streaming platforms combine, Paramount+ and HBO Max would become one service, likely boosting scale. If the deal falls apart, both sides return to running smaller streamers that may struggle to compete on their own.
The next few months will decide whether HBO Max and Paramount+ become one app, or whether Warner Bros. Discovery charts its own path. Either way, the content you watch and the stock you own will feel the change.