The Justice Department Cleared Paramount's $110 Billion Warner Bros. Deal. The States Could Still Stop It.

The federal government’s biggest potential objection to the largest media merger in a generation just evaporated. On June 12, the Justice Department’s Antitrust Division cleared Paramount Skydance’s roughly $110 billion acquisition of Warner Bros. Discovery — and it did so without demanding a single asset sale, behavioral condition or concession, according to multiple reports of the decision.

That clearance hands David Ellison’s Paramount Skydance a decisive win in Washington. Combine the two companies and you get one of the deepest content vaults on the planet: the Paramount and Warner Bros. film studios, CBS, the CNN and Discovery cable networks, HBO, and the Paramount+ and HBO Max streaming services under a single owner. The deal values Warner Bros. Discovery at $31 a share in cash, about $81 billion in equity and roughly $110 billion once its debt is counted.

But federal antitrust clearance is not the finish line. A coalition of state attorneys general — led by California and including New York and around ten other states — has been examining whether folding two of Hollywood’s largest studios and streaming libraries into one company harms competition, and reporting indicates several are weighing a lawsuit to slow or block the transaction. A separate complaint from a group of Paramount subscribers, filed in California federal court, is already seeking to stop the deal on antitrust grounds. The merger that just cleared its hardest national hurdle now faces its most unpredictable one.

How Paramount won Warner Bros.

The deal is the product of a bidding war that ran through the winter and spring. Warner Bros. Discovery, long rumored to be a takeover or breakup target, drew competing interest from Paramount Skydance — the company Ellison built after merging Skydance with the old Paramount — and from Netflix, which wanted Warner’s studio and streaming assets.

Paramount kept raising its bid until Netflix walked. By late February, Paramount’s sweetened all-cash offer of $31 a share was enough for Warner’s board to choose Paramount over the streamer. Netflix dropped its pursuit, and Paramount agreed to absorb the $2.8 billion breakup fee that Warner owed Netflix for terminating their earlier arrangement — a payment Netflix later confirmed it had received.

Shareholders ratified the outcome on April 23, approving the Paramount deal overwhelmingly in a special vote. In the same meeting, they delivered a pointed rebuke on a separate question, rejecting the proposed exit pay packages for Warner chief executive David Zaslav and other executives — an advisory vote that did not change the merger but underscored investor frustration with how the company had been run. Bondholders gave their consent in late May.

Regulators abroad began signing off, too. New Zealand’s Commerce Commission said in early June it would take the matter no further, and Germany’s foreign-investment authority had cleared the tender offer back in January. The June 12 DOJ decision was the centerpiece: the single approval most likely, if it had gone the other way, to kill the deal outright. It didn’t.

What the antitrust clearance settles — and what it doesn’t

The Justice Department’s sign-off matters because federal antitrust enforcers have the broadest reach and the heaviest tools. A demand for divestitures — forcing Paramount to sell, say, a cable network or a studio division — could have reshaped the deal or made it uneconomic. By clearing the transaction clean, the department signaled it did not see the combination as a threat to competition serious enough to warrant remedies.

What the clearance does not do is foreclose the states. State attorneys general can bring their own antitrust cases under both federal and state law, and they have grown more willing to act independently of Washington in recent years. California is the jurisdiction to watch: it is home to much of the industry the deal would consolidate, and it has signaled the closest scrutiny. Paramount, for its part, has reportedly floated undisclosed concessions to California and roughly ten other states as it tries to keep a multistate challenge from materializing.

A state lawsuit would not automatically stop the merger, but it could delay the timeline, force concessions the DOJ never sought, or — in the worst case for Paramount — put the whole transaction in front of a judge. That uncertainty is why the company still describes the deal as expected to close in the third quarter of 2026 rather than treating it as done.

There is also Europe. The European Union’s review carries an initial deadline in early July that could be extended, and the United Kingdom’s Competition and Markets Authority opened a Phase 1 inquiry with a decision deadline of August 7. International approvals rarely sink a deal of this kind outright, but they can attach conditions in specific markets. Taken together, the remaining hurdles mean the merger has cleared the tallest fence and still has several to go.

The Netflix feud nobody expected to spill into public

The most striking development of the past week is not the clearance itself but the open hostility between the companies that fought over Warner Bros. Even after Netflix walked away in February and collected its $2.8 billion, the rivalry did not end — it migrated into the regulatory arena.

In a securities filing this month, Paramount accused Netflix of running what it called a “panic-level” and “scorched-earth campaign” to “poison regulators and other stakeholders against the Transaction.” The language is unusually combative for a corporate filing, and it frames Netflix as a sore loser working behind the scenes to derail a deal it could not win. Netflix has pushed back hard, with people close to the company calling the accusations “absurd.”

The spat is more than Hollywood theater. It is a window into how high the stakes are. A combined Paramount–Warner Bros. would be a far more formidable streaming competitor to Netflix, pairing HBO Max’s prestige catalog with Paramount’s sports and broadcast reach. Netflix has every commercial incentive to want the merger blocked or weakened, and Paramount has every incentive to cast any opposition as self-interested. For regulators and judges now weighing the deal, the feud is a reminder that the loudest objections in an antitrust fight often come from the rivals with the most to lose — a dynamic that has reshaped Hollywood’s competitive map as streaming and even generative AI redraw the business.

What comes next

The near-term calendar runs through the states and Europe. Watch for whether California and its partners file suit or settle for concessions, whether the EU extends its July review, and how the UK’s CMA rules by its August deadline. Paramount has cleared the approval most observers considered decisive; the question now is whether the remaining reviewers attach strings the Justice Department declined to.

The bigger story is what the combined company would mean for audiences. Consolidation on this scale tends to show up later in the fine print — in subscription prices, in which libraries land on which service, in what gets greenlit and what gets shelved. A single owner controlling Warner Bros., Paramount, HBO, CNN and two major streaming platforms is a concentration of cultural power the industry has not seen in years. It is arriving as Hollywood’s traditional gatekeepers are already losing ground to social platforms and independent distribution, and as the economics of the broader media business keep shifting under everyone’s feet. For now, Paramount has the deal it wanted. Whether it gets to keep it on these terms is up to the states.