David Ellison Tells Paramount Staff Merger Delay Won't Derail $111 Billion Warner Bros. Discovery Deal

Paramount Skydance chief executive David Ellison sent staff a memo Monday morning aiming to reassure employees that the company's $111 billion acquisition of Warner Bros. Discovery remains on track, even as the deal faces a fresh legal roadblock that could push its closing into 2027.

The message, sent around 10 a.m. ET and first made public by Variety, came days after Paramount agreed to shelve the merger for at least several months while it fights off an antitrust challenge brought by a coalition of 12 state attorneys general.

Rather than proceed with a preliminary injunction hearing that had been set for August 3, the two companies, the states and the Writers Guild of America struck a deal to skip that step entirely and head straight to a trial on the underlying merits of the case.

Ellison struck an upbeat tone despite the setback, telling staff the company's legal footing remains solid. "We remain highly confident that this transaction does not pose any legal issues, and we will complete it and bring these two companies together," he wrote, adding that the decision to pause the deal reflected a calculated bet on the strength of Paramount's case rather than a retreat. "We believe this is the right path because the facts and the law are on our side, and a full hearing will demonstrate why the plaintiffs' arguments should not prevail."

The two sides are now due to hash out possible trial dates this week and report back to the court by Friday, July 31. The gap between the parties' expectations is wide: the states are pushing for a trial sometime in 2027, while Paramount wants the case heard as early as this fall, according to the memo. Whichever timeline prevails will determine how long the merger stays frozen, since the companies have agreed not to close until the litigation is resolved.

Paramount has leaned heavily on its global regulatory track record to make its case that the deal poses no competitive threat. Ellison noted that authorities in 65 jurisdictions, including the European Commission along with regulators in Australia, China, Germany, France, Spain, Canada and South Korea, have either signed off on the merger or opted not to intervene on antitrust or foreign-investment grounds. That tally includes a green light from the U.S. Department of Justice in June, a clearance that came despite reported internal objections from career antitrust attorneys who had been reviewing the transaction.

Financing for the deal includes $24 billion committed by sovereign wealth funds tied to Saudi Arabia, Qatar and the United Arab Emirates, which together would hold a 38.5% stake in the combined company. Paramount has maintained that because those foreign backers won't receive board seats or voting shares, the investment shouldn't trigger a review by the Committee on Foreign Investment in the United States.

In his memo, Ellison acknowledged the toll that months of legal uncertainty have taken on staff, thanking employees for their patience while stressing that day-to-day operations haven't changed. "Paramount and WBD are separate companies operating independently, and our focus remains on serving our audiences, supporting one another and executing our strategy," he wrote. He said integration planning will continue under Tony Driscoll, who heads the company's Integration Management Office, though the pace of that work may shift to reflect the delay. Ellison closed the memo on a rallying note: "Let's go!"

Below is the full text of Ellison's memo, as sent to Paramount staff Monday:

Team,

I know there's been a lot of news coverage about our company in recent weeks, and I recognize that references to court proceedings, delays and deal timing can create questions and uncertainty. And so, I want to take a moment to share an update on the litigation related to our proposed transaction with Warner Bros. Discovery.

While many of you have likely been following the deal's developments, here's a brief recap. Over the past several months, our leadership team and legal partners have worked closely with antitrust and competition authorities around the world. As a result, regulatory bodies and governments representing 65 jurisdictions – including the European Commission, Australia, China, the U.S., Germany, France, Spain, Canada and South Korea – have either cleared the transaction or elected not to challenge it on competition and/or foreign direct investment grounds.

These clearances reflect both the facts and the law: this combination is fully consistent with the anti-trust laws, and will create a stronger, more competitive media company with the scale to invest more deeply in storytelling, expand consumer choice and compete more effectively in a rapidly changing entertainment landscape. Just as important, it will create more opportunities for creators by enabling the combined company to invest more in content, take creative risks and accelerate the technologies that will deliver greater choice and a better experience for audiences everywhere. Absent the lawsuit filed by the California Attorney General along with 11 other attorneys general, and a separate lawsuit from the Writers Guild of America (WGA), both seeking to block the merger, we would have been able to close the transaction in the coming weeks.

Let me be clear: we remain highly confident that this transaction does not pose any legal issues, and we will complete it and bring these two companies together. To that end, Paramount, WBD, the state attorneys general and the WGA have agreed not to proceed with the court-ordered preliminary injunction hearing scheduled for August 3. The parties will instead move directly to a trial on the merits. We believe this is the right path because the facts and the law are on our side, and a full hearing will demonstrate why the plaintiffs' arguments should not prevail.

This week, the parties will discuss potential trial dates and provide an update to the court next Friday. The timing of the trial will be determined after the court reviews those discussions and issues a schedule.

In the meantime, absent further developments, the completion of the transaction will remain paused. Our teams will continue planning under the direction of the Integration Management Office (IMO) and in consultation with our legal advisors. Given the revised timeline, the IMO may adjust the pace and sequencing of its work in the weeks ahead to reflect the revised timeline. Those involved in the integration planning effort will hear directly from Tony Driscoll, who leads the IMO for Paramount. I also encourage you to visit the Integration Hub for the latest updates, FAQs and other resources.

I know this additional uncertainty has been challenging, and I want to thank you for your continued patience, commitment and collective contributions. For now, it remains business as usual. Paramount and WBD are separate companies operating independently, and our focus remains on serving our audiences, supporting one another and executing our strategy. We've had a strong first year as the new Paramount, and that's because of you. I'm incredibly proud of everything this team has accomplished.

As always, we are committed to being as direct and transparent as possible. When there is meaningful, confirmed information to share, you will hear it from us. Until then, please know that we remain confident in our position and firmly believe this transaction is pro-competitive and will deliver meaningful benefits for consumers, creators and the broader entertainment industry. Thank you again for all you do for our company, our audiences and one another. I hope you have a wonderful summer and look forward to what we will accomplish together in the months and years ahead.

Let's go!

David