<\/p>\n
Five weeks ago, Paramount Skydance (PSKY) was willing to sell CNN to end this fight.<\/p>\n
Chief Legal Officer Makan Delrahim said in August that a sale of the network was on the table as the company tried to clear the state antitrust suit blocking its takeover of Warner Bros. Discovery (WBD).<\/p>\n
The terms under discussion are now much cheaper. Reuters reported Friday that independent content monitoring of CNN and a commitment on the number of theatrical releases are among the items being negotiated, citing people familiar with the matter. Nobody is selling anything.<\/p>\n
Related: Paramount threatens key market exit over $110 billion mega deal<\/p>\n
The price of peace just got cheaper<\/p>\n
That shift is the actual story, and most coverage buried it under the stock pop.<\/p>\n
California Attorney General Rob Bonta has said repeatedly that structural remedies, meaning divestitures, protect competition better than promises to behave. Monitoring and release quotas are promises to behave.<\/p>\n
The Wall Street Journal reported Friday that the sides also discussed operating the studios separately for a period rather than merging them immediately. That is a delay, not a divestiture. On these terms, Paramount keeps the company whole.<\/p>\n
A Paramount spokesperson declined to comment. The California Department of Justice said the talks are confidential, Reuters reported.<\/p>\n
How a September close became a March trial date<\/p>\n
The calendar explains why Paramount’s posture softened the state’s position, rather than the other way around.<\/p>\n
Paramount agreed on Feb. 27 to buy WBD for $31.00 a share in cash, valuing it at $81 billion in equity and $110 billion including debt, according to Paramount. The Justice Department cleared it in June. Twelve states sued in July, and a court stipulation pushed the outside closing date to June 2027.<\/p>\n
Then the meter started. The merger agreement adds “ticking consideration” for every day past Sept. 30:<\/p>\n
Paramount owes Warner Bros. shareholders $7 million a day until the deal closes, according to CNBC. That is roughly $650 million a quarter.<\/p>\n
The fee accrues at $0.00277778 per share daily, capped at $0.25 per 90-day period, per WBD’s proxy filing.<\/p>\n
A March 2027 trial of the states’ lawsuit would mean possibly $1.3 billion in fees before a verdict, in addition to financing and legal costs.<\/p>\n
Paramount has asked the states to post a $1.88 billion bond, with a hearing set for Sept. 24, Variety reported.<\/p>\n
What the stocks said after the bell<\/p>\n
Paramount Skydance closed Friday at $10.21, down about 3.9% on the session, then rose 7.6% after hours on the settlement reports, according to Seeking Alpha. Warner Bros. Discovery gained 8.3%.<\/p>\n
WBD is no longer a media stock in any useful sense. It is a merger-arbitrage position: the share price tracks the odds of a $31 cash payout, not HBO Max subscriber growth. It closed Friday roughly 10% below that price, and Friday night’s move erased most of the gap.<\/p>\n
The more revealing move was Paramount’s. Acquirers usually fall when a contested deal firms up, because certainty means paying.<\/p>\n
Paramount rose because the delay now costs more than the concession does.<\/p>\n
Paramount owes Warner Bros. shareholders $7 million a day, or roughly $650 million a quarter, for every day the deal stays unclosed past Sept. 30.<\/p>\n
SOPA Images \/ Getty Images<\/p>\n
Analysts still refuse to price a clean close<\/p>\n
While after-hours traders rushed to price in a resolution, Wall Street has not caught up to the market. Nineteen analysts polled by S&P Global rate WBD a consensus Hold with an average 12-month target of $29.82, according to StockAnalysis.<\/p>\n
That number is the tell. In an all-cash deal, a target below the contracted $31 is not a valuation call. It is a discount for the chance that the deal dies.<\/p>\n
The spread between desks shows how wide the disagreement runs. UBS carries a $31 target while Bank of America sits at $24, according to Yahoo Finance. Barclays reinstated coverage at Equal Weight on Sept. 16, and Bernstein reaffirmed its Hold a day earlier.<\/p>\n
For investors, the practical read is blunt. Upside is capped near $31 plus accrued fees, while the downside if talks collapse is the unaffected price the deal replaced.<\/p>\n
More Entertainment:<\/p>\n
AMC credit upgrade comes with a catch<\/p>\n
New Spider-Man movie raises stakes for struggling cinema giant<\/p>\n
Disney’s big bet on the NFL is already paying major dividends<\/p>\n
State attorneys general are the new last hurdle<\/p>\n
Paramount cleared the DOJ, the FCC and regulators in more than 65 countries. One state coalition still froze a $110 billion transaction for two months and extracted concessions from it.<\/p>\n
A settlement could come as soon as this weekend, according to CNBC. That would end the state case, but not every obstacle.<\/p>\n
The Writers Guild of America is suing separately over pay and working conditions, and a union spokesperson did not say whether it is part of the current talks, according to CNBC.<\/p>\n
The precedent is what lasts. Federal clearance used to be the finish line for a megadeal. The next contested merger in media or tech will now budget for a second fight in state court, and for the ticking fee that makes losing it expensive.<\/p>\n
Related: Paramount just offered up its crown jewel<\/p>\n
#weekend #deal #rewrite #Paramount039s #Warner #Bros #timeline<\/p>\n","protected":false},"excerpt":{"rendered":"
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