Track market-moving stories before they get noisy

, /PRNewswire/ -- Warner Bros. Discovery, Inc. (the "Company") (Nasdaq: WBD) today announced that it will report its second quarter 2026 results on Thursday, August 6, 2026 before the market opens. Links to the live webcast of the conference call as well as the earnings materials will be available in the "Investor Relations" section of the Company's website at https://ir.wbd.com/ at approximately 7:00 a.m. ET. The Company will host a conference call at 8:00 a.m. ET that same day to discuss the results.

A replay of the webcast will also be available in the "Investor Relations" section of the Company's website for twelve months.

About Warner Bros. Discovery:
Warner Bros. Discovery is a leading global media and entertainment company that creates and distributes the world's most differentiated and complete portfolio of branded content across television, film, streaming and gaming. Warner Bros. Discovery inspires, informs and entertains audiences worldwide through its iconic brands and products including: Discovery Channel, HBO Max, discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, Animal Planet, Science Channel, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Pictures Animation, Warner Bros. Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Español, Hogar de HGTV and others. For more information, please visit www.wbd.com.

SOURCE Warner Bros. Discovery, Inc.

Earlier this year, the streaming and entertainment industry witnessed one of its most high-stakes megadeals ever, stunning industry observers. Not only is it historic in its size, but it is also predicted to disrupt Hollywood and the media business as we know it. 

After years of Warner Bros. Discovery (WBD) struggling under the weight of billions of dollars in debt, compounded by declining cable viewership and fierce competition from streaming platforms, the company has been considering major strategic changes, including selling its entertainment assets to one of its rivals.

Several major players saw the potential in acquiring the media giant, and in December, Netflix announced it would acquire WBD’s studios and streaming for $82.7 billion.

But in a surprise eleventh-hour move in late February, the David Ellison-run Paramount became the winner of this bidding war, offering $111 billion to acquire all of WBD’s assets, including its studios, HBO, streaming platforms, games, and TV networks such as CNN and HGTV. Paramount was recently acquired by Ellison with significant support from his father, Larry Ellison — the Oracle chairman, world’s sixth-richest person, and major Trump donor.

Paramount’s offer was approved by the U.S. Department of Justice (DOJ) in June. However, a federal judge just paused the deal after a lawsuit was filed on July 13 by a coalition of 12 state attorneys general.

Let’s break down exactly what is happening, what’s at stake, and what could come next. 

What has happened so far? ​This all started back in October when Warner Bros. Discovery revealed it was exploring a potential sale after receiving unsolicited interest from several major players in the industry.

​The bidding process quickly became competitive, and Paramount and Comcast emerged as serious contenders, with Paramount initially viewed as the frontrunner. 

However, WBD’s board eventually determined that an offer from the streaming giant Netflix was the most attractive. Netflix offered $82.7 billion for just Warner’s film, television, and streaming assets.

Thus began the bidding war. Paramount believed its bid of approximately $108 billion for all of Warner’s assets was superior to Netflix’s offer that focused on just the studios and streaming. To sweeten its deal, Netflix amended its agreement in January to an all-cash offer at $27.75 per share of Warner Bros. Discovery, further reassuring investors and paving the way for the deal to proceed.

​Paramount persisted in its attempts to acquire WBD. Still, the Warner board repeatedly rejected its offers, citing concerns about Paramount’s heavy debt load and the increased risk associated with its proposal, including concern over the suite of investors bankrolling Paramount’s bid, which includes Saudi, Qatari, and Abu Dhabi sovereign wealth funds. The board noted that Paramount’s offer would have left the combined company burdened with $87 billion in debt, a risk they were unwilling to take at the time.

In January, Paramount filed a lawsuit seeking more information about the Netflix deal. A month later, the company sought to sweeten its deal by announcing it would offer a $0.25 per share “ticking fee” to WBD shareholders for each quarter the deal fails to close by December 31, 2026. It also said it would pay the $2.8 billion breakup fee if Warner backs out of its deal with Netflix.

Then, in a final attempt to secure a deal, Paramount increased its offer to $31 per share in February. This prompted the WBD board to prolong discussions with Paramount regarding a potential agreement, considering it as a superior offer. Netflix declined to increase its bid and withdrew from the negotiations.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement on February 26. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”

In addition to the billions Paramount already holds in debt, the company is also set to assume the approximately $33 billion in debt Warner Bros. Discovery holds under the agreement. The deal will be backed by a $54 billion debt commitment from Bank of America, Merrill Lynch, Citi, and Apollo Global Management, as well as $45.7 billion in equity from Larry Ellison.

Regulatory hurdles and other concerns In addition to the assumption of substantial debt posing a significant financial burden, Paramount faces several other hurdles in its deal with WBD that could impact the success of the transaction. 

For one, Ellison has warned about significant job reductions that are expected in the near future. There have already been widespread concerns among critics about potential job losses and lower wages.

Ellison is also a controversial figure in the industry, and his ownership of CBS News has been seen as sympathetic and supportive of the administration of Donald Trump, of whom his father, Larry Ellison, is a major donor. Under Ellison’s ownership of Paramount, reporting critical of the administration has been shelved or received increased scrutiny from Ellison or his appointed head of CBS News, the conservative provocateur Bari Weiss.

This has led to some concern among employees at Warner-owned CNN. Trump has personally sought concessions from news divisions critical of him, including a $16 million settlement from CBS, before his FCC would approve the Ellison takeover of Paramount. Before Netflix bowed out of the deal, Trump pressured the company to fire the former Biden White House official Susan Rice from its board. He has publicly stated his intentions to bring CNN to heel under new owners.

Regulatory scrutiny is another hurdle. Such a large-scale merger has attracted attention from lawmakers.

For instance, California attorney general Rob Bonta said in a statement on February 26 that “these two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

A day before Netflix backed out, it was revealed that a coalition of 11 state attorneys general urged the U.S. Department of Justice to review the merger under concerns it will stifle competition and increase subscription prices. This comes months after U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal voiced their concerns to the Justice Department’s Antitrust Division, warning that such a massive merger could have serious consequences for consumers and the industry at large. The senators argue that the merger could give the new media giant excessive market power, enabling it to raise prices for consumers and stifle competition.

Despite the DOJ approving the deal in June, a coalition of 12 state attorneys general filed a lawsuit on July 13 to block the merger. The suit argues it would lessen competition and harm movie theaters, cable distributors, and viewers. The coalition is led by Bonta, with Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington also joining. 

In response, U.S. District Judge Araceli Martínez-Olguín issued a 14-day pause.

When is the deal expected to close? Paramount initially aimed to finalize its acquisition of WBD as early as July. However, the transaction has now been temporarily paused until August 3, with a hearing set to assess whether the freeze will extend further.

Stay tuned…

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Warner Bros. Discovery (WBD - Free Report) closed the most recent trading day at $26.87, moving -1.54% from the previous trading session. This move lagged the S&P 500's daily loss of 1.01%. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 1.4%.

Shares of the operator of cable TV channels such as TLC and Animal Planet have appreciated by 4.16% over the course of the past month, outperforming the Consumer Discretionary sector's gain of 1.27%, and the S&P 500's gain of 0.32%.

Analysts and investors alike will be keeping a close eye on the performance of Warner Bros. Discovery in its upcoming earnings disclosure. The company is predicted to post an EPS of -$0.12, indicating a 119.05% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $9.33 billion, indicating a 4.9% downward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of -$1.07 per share and revenue of $36.96 billion, which would represent changes of -468.97% and -0.9%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Warner Bros Discovery. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% lower. Warner Bros. Discovery presently features a Zacks Rank of #4 (Sell).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

14.7.2026 11:34, WBD, PSKY

Skupina dvanácti amerických států v čele s Kalifornií podala antimonopolní žalobu, kterou chce zablokovat převzetí Warner Bros. Discovery společností Paramount Skydance v transakci v celkové hodnotě 110 mld. USD. Podle žaloby podané u federálního soudu v Kalifornii by fúze vedla k vyšším cenám, nižší kvalitě obsahu a menšímu výběru filmů a pořadů pro diváky.

Spojením dvou z pěti největších amerických studií by vznikl subjekt ovládající 27 % trhu s kinofilmy a přes 30 % očekávaných blockbusterů. Více než 90 % tohoto trhu by pak kontrolovaly pouze čtyři společnosti. Nová firma by navíc vlastnila přes 50 kabelových kanálů, dvě velké zpravodajské sítě (CBS a CNN) i streamovací služby Paramount+ a HBO Max.

Paramount označil žalobu za „chybnou po faktické i právní stránce“ a hodlá se bránit u soudu. Tvrdí, že spojená společnost bude moci více investovat do prémiového obsahu a kreativních talentů.

Soudní spor pravděpodobně zmaří plány dokončit fúzi do konce září, kdy Paramountu začnou nabíhat poplatky akcionářům Warner Bros. za zpoždění. Státy požadují, aby obě firmy s uzavřením obchodu počkaly na rozhodnutí soudu, které může trvat několik měsíců.

Akcie Warner Bros. Discovery a Paramount Skydance Akcie Warner Bros. Discovery (WBD) v předburzovní fázi obchodování oslabují o 0,66 % na 26,91 USD, akcie Paramount Skydance (PSKY) oslabují o 0,1 % na 9,54 USD.

Zdroj: Bloomberg

Michal Bárta
Fio banka, a.s.
Prohlášení

A coalition of a dozen states alleged the Hollywood merger would boost prices for consumers and lower quality for film and television.

Warner Bros. Discovery (WBD - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this operator of cable TV channels such as TLC and Animal Planet have returned -1.9%, compared to the Zacks S&P 500 composite's -1.7% change. During this period, the Zacks Broadcast Radio and Television industry, which Warner Bros. Discovery falls in, has lost 6%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Warner Bros. Discovery is expected to post a loss of $0.12 per share, indicating a change of -119.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of -$1.07 for the current fiscal year indicates a year-over-year change of -469%. This estimate has changed -14.9% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $0.03 indicates a change of +97.3% from what Warner Bros. Discovery is expected to report a year ago. Over the past month, the estimate has changed +50%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Warner Bros. Discovery is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Warner Bros. Discovery, the consensus sales estimate of $9.39 billion for the current quarter points to a year-over-year change of -4.3%. The $37.04 billion and $38.02 billion estimates for the current and next fiscal years indicate changes of -0.7% and +2.6%, respectively.

Last Reported Results and Surprise HistoryWarner Bros. Discovery reported revenues of $8.89 billion in the last reported quarter, representing a year-over-year change of -1%. EPS of -$1.17 for the same period compares with -$0.18 a year ago.

Compared to the Zacks Consensus Estimate of $8.93 billion, the reported revenues represent a surprise of -0.42%. The EPS surprise was -1070%.

Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates just once over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Warner Bros. Discovery is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Warner Bros. Discovery. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Warner Bros. Discovery (WBD - Free Report) closed at $27.13 in the latest trading session, marking a +1.46% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 1.18%. On the other hand, the Dow registered a gain of 0.59%, and the technology-centric Nasdaq increased by 2.07%.

Heading into today, shares of the operator of cable TV channels such as TLC and Animal Planet had lost 1% over the past month, outpacing the Consumer Discretionary sector's loss of 1.1% and the S&P 500's loss of 2.9%.

Investors will be eagerly watching for the performance of Warner Bros. Discovery in its upcoming earnings disclosure. The company is predicted to post an EPS of -$0.12, indicating a 119.05% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $9.39 billion, indicating a 4.33% decline compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of -$1.07 per share and a revenue of $37.04 billion, indicating changes of -468.97% and -0.69%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Warner Bros Discovery. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 19.7% lower. Warner Bros. Discovery presently features a Zacks Rank of #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 110, placing it within the top 46% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Absolute Batman

Warner Bros. Animation, 2026

Three new DC universe animated series were announced during a joint DC Studios and Warner Bros. Animation presentation at the 2026 Annecy International Animation Film Festival.

The presentation featured Peter Safran (Co‑Chairman and Co‑CEO, DC Studios) and Sam Register (President, Warner Bros. Animation, Cartoon Network Studios, and Hanna‑Barbera Studios Europe), alongside Warner Bros. Animation artists who shared first looks and creative insights into the next era of DC animation.

Absolute Batman, based on the award-winning and best-selling DC comic book series of the same name, will see Scott Snyder serve as executive producer and showrunner. Snyder wrote the comic book series. Nick Dragotta provided art for the book series and will take a producer role on the TV series.

In the comic book series, Bruce Wayne was a blue collar worker from the projects who had lost one parent, not two. And he was a jacked man who also fought crime, but more resembled an MMA fighter than the traditionally proportioned Caped Crusader.

The series is described by the company as “still in development” and no network home has been announced. But it did provide this brief logline:

Absolute Batman boldly reinvents the Batman mythos for a new generation of fans, reimagining the Dark Knight as a working-class hero up against impossible odds (and the most terrifying foes ever), on a mission to prove that even in an era of wealth, power and corruption, one good person can change the world.    No manor, no money... all Batman. When you take away the manor, the money, the advantages, what you’re left with is something absolute.

Also in development is the kids series Krypto, which stars everyone’s favorite Super Dog.

Krypto

Warner Bros. Animation, 2026

The series is being produced by C.H. Greenblatt, and it is also described as “being in development.”

And even the official logline is a bit scant on details:

When he’s not hanging out with Superman or Supergirl, Krypto tags along with a gang of misfit criminal wannabes who live down the block, and they soon discover he’s a ball of destructive, lovable energy worse than any of them! As he follows them into misadventures and poorly laid plans, Krypto’s pure nature slowly ends up redeeming them, whether they want it or not.

Of the three just-announced shows, the one closest to a premiere date is Joker: Laugh Riot, which has been given a greenlight and is currently in production.

Joker: Laugh Riot

Warner Bros. Animation, 2026

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Produced by Jim Krieg and Yasuhuro Aoki, the series is described as the story of what happens to the Joker when he loses his biggest foe:

When Batman is murdered, the Joker launches a ruthless crusade through Gotham’s underworld to find the killer who took away his greatest adversary. But as his violent quest for answers pushes him closer towards vigilante than villain, Joker is forced to confront the truth that without Batman, he doesn’t know who he is.

Most of the large animation houses are doing presentations at the Annecy International Animation Film Festival this week, among them Netflix, who announced an impressive slate of original animated films and TV shows.

In the latest close session, Warner Bros. Discovery (WBD - Free Report) was down 1.35% at $26.24. The stock's change was less than the S&P 500's daily loss of 1.22%. Elsewhere, the Dow saw a downswing of 0.98%, while the tech-heavy Nasdaq depreciated by 1.35%.

The operator of cable TV channels such as TLC and Animal Planet's stock has dropped by 1.81% in the past month, falling short of the Consumer Discretionary sector's gain of 2.1% and the S&P 500's gain of 1.56%.

The investment community will be closely monitoring the performance of Warner Bros. Discovery in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be -$0.12, reflecting a 119.05% decrease from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $9.39 billion, indicating a 4.33% decline compared to the corresponding quarter of the prior year.

WBD's full-year Zacks Consensus Estimates are calling for earnings of -$1.07 per share and revenue of $37.04 billion. These results would represent year-over-year changes of -468.97% and -0.69%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Warner Bros Discovery. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 49.63% lower. At present, Warner Bros. Discovery boasts a Zacks Rank of #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 160, finds itself in the bottom 35% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

The media and entertainment sector is undergoing a terminal consolidation phase, completely altering how capital flows through the sector. Investors chasing unverified buyout rumors learned a harsh lesson when speculative chatter surrounding Lionsgate Studios Corp. NYSE: LION and Netflix, Inc. NASDAQ: NFLX collapsed overnight. Retail traders piled in on hopes of a premium buyout, only to be crushed by a swift denial from Netflix management. Speculative intellectual property hunting is a wealth hazard. Smart money is deploying capital in entirely different ways.

Trillion-dollar technology conglomerates exercise strict discipline, prioritizing margin defense over legacy studio bailouts. The unconditional Department of Justice clearance of the $110.9 billion Paramount Skydance NASDAQ: PSKY and Warner Bros. Discovery, Inc. NASDAQ: WBD mega-merger, alongside the $22 billion Fox Corporation NASDAQ: FOXA buyout of Roku, Inc. NASDAQ: ROKU, establishes a new paradigm. The mergers-and-acquisitions playbook has permanently pivoted from content hoarding to distribution control and hard arbitrage.

Get Lionsgate Studios alerts:

Debt Traps and Dead Scripts: The Studio IllusionLionsgate Studios Today

LION

Lionsgate Studios

$15.05 -0.16 (-1.05%)

As of 03:58 PM Eastern

52-Week Range$5.55▼

$16.70Price Target$15.37

When options volume for Lionsgate Studios spiked to over 21,646 contracts on June 16, heavily concentrated in July 2026 $16 and $18 speculative calls, the trap was set. The swift denial instantly crushed this premium. This serves as a textbook case of retail behavior generating highly monetizable shorting opportunities for institutional desks.

Let's unpack why the buyout rumor never made fundamental sense. Acquiring intellectual property sounds strategic until you examine the underlying balance sheets. Recent 10-K filings reveal Lionsgate Studios faces an estimated $1.96 billion in debt service obligations over the next 12 months. In an environment where capital costs remain elevated, acquiring an overleveraged balance sheet severely dilutes free cash flow margins for any potential buyer.

Lionsgate Studios carries a massive forward price-to-earnings ratio of over 88, suggesting the current valuation is heavily skewed toward an artificial acquisition premium rather than fundamental earnings growth. Last quarter, Lionsgate Studios missed earnings-per-share estimates, reporting a 7-cent loss versus an expected 2-cent loss.

This lack of fundamental profitability makes the $1.96 billion debt wall even more precarious. Netflix operates with a highly disciplined capital allocation framework. Netflix refuses to function as a white knight for struggling studios just to acquire legacy film franchises.

Netflix simply does not need expensive, debt-laden acquisitions to drive top-line revenue. Netflix surpassed 250 million monthly active users on its ad-supported tier in May 2026. Coupled with aggressive live sports integration, organic average revenue per user is expanding rapidly. Net margins are robust at 28.52%. Sustainable organic growth negates the strategic necessity for margin-dilutive acquisitions.

Institutional short sellers understood this reality. Financial Industry Regulatory Authority data indicates that short interest in Lionsgate Studios surged by more than 191% over the trailing 12 months, representing roughly 9.4% of the float. Smart money bet against the standalone viability of Lionsgate Studios long before retail investors chased the intraday spike.

Digital Tollbooths: Owning the Living Room Operating SystemThe fundamental value in the entertainment sector has migrated from the content itself to the hardware and software that delivers it. Content production is highly commoditized and incredibly capital-intensive. Distribution infrastructure operates as a high-margin digital tollbooth. Fox Corporation recognized this structural dynamic and formalized an agreement to acquire Roku for $22 billion.

FOX Today

$48.79 -0.60 (-1.21%)

As of 04:00 PM Eastern

52-Week Range$48.55▼

$76.39Dividend Yield1.15%

P/E Ratio12.87

Price Target$74.36

This transaction is a masterclass in modern media strategy. Fox Corporation secures the connected television home screen and the invaluable first-party viewing data of over 100 million households. First-party viewing data allows Roku to charge premium rates for targeted programmatic advertising.

By controlling the interface where viewers select streaming applications, Roku extracts a toll from every media transaction on the television screen. Fox Corporation recognized that integrating this targeted advertising engine with its live broadcast network creates a monetization loop that traditional content studios simply cannot replicate.

Owning the living room operating system yields higher structural leverage than owning a mid-tier movie catalog. For investors, the optimal strategy is to accumulate equities that control these digital gateways.

Infrastructure providers operating ad-insertion software, smart television operating systems, and programmatic video ecosystems present compelling fundamentals. These infrastructure providers operate with high-margin, software-as-a-service models.

Roku and similar infrastructure providers remain completely immune to the heavy capital expenditures required to produce blockbuster films or prestige television. When legacy studios realize they cannot survive without localized distribution and targeted ad-insertion capabilities, these infrastructure stocks become the next wave of highly probable acquisition targets.

Spin-Off Scripts: Trading the Sum of the Media PartsGenerating absolute returns in the current volatile environment demands rotating out of mid-cap studio rumors and deploying capital into mathematical spreads. The Paramount Skydance and Warner Bros. Discovery transaction offers a defined, hard catalyst. Warner Bros. Discovery currently trades near $27, down from a finalized $31 all-cash buyout price. That represents a roughly 14 % merger arbitrage spread.

Warner Bros. Discovery Today

WBD

Warner Bros. Discovery

$26.88 -0.07 (-0.26%)

As of 04:00 PM Eastern

52-Week Range$10.75▼

$30.00Price Target$27.04

Historically, media mega-mergers faced intense regulatory scrutiny, keeping arbitrage spreads wide as investors priced in the risk of deal collapse. With the Department of Justice Antitrust Division granting unconditional clearance to the $110.9 billion transaction, the regulatory risk profile is exceptionally asymmetric.

For retail and institutional investors, merger arbitrage involves purchasing Warner Bros. Discovery shares at a discount to the open market price and holding them until the acquiring company finalizes the transaction, automatically converting those shares into the $31 cash payout. Institutional capital will increasingly rotate out of volatile equities and into these high-probability, event-driven spreads to capture yield as the Paramount Skydance deal approaches its closing date.

Beyond outright acquisitions, persistent margin compression across the interactive entertainment space is forcing major corporate restructuring. Microsoft Corporation NASDAQ: MSFT is facing widespread speculation regarding the restructuring of its struggling gaming unit. Internal options reportedly include spinning off the Xbox division into a wholly owned subsidiary or an independent venture to mitigate the capital drain.

This highlights a broader structural shift toward capital efficiency. Buying Microsoft Corporation purely for a minor gaming restructuring offers diluted returns. The actionable trade involves waiting for definitive SEC S-1 filings or spin-off authorizations, then acquiring the newly separated, pure-play equity. Standalone entities unburdened by parent-company overhead typically experience immediate repricing of their sum-of-the-parts valuation. This dynamic consistently attracts aggressive institutional accumulation.

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Selling into rumor-driven liquidity vacuums capitalizes on retail behavior while maintaining strict institutional risk management. Capital deployment requires formalized term sheets rather than reacting to sector-wide fear of missing out. The swift 5% after-hours correction in Lionsgate Studios shares following Netflix's denial proves that legacy technology companies will not overpay for content.

Investors may want to evaluate media-sector exposure, rotating away from speculative intellectual property holders facing massive debt maturities. Accumulating connected television infrastructure companies or capturing the yield in cleared merger spreads offers a highly calculated approach to navigating the media industry's structural transformation.

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The Justice Department (DOJ) on Friday announced it has closed its antitrust investigation into Paramount Skydance's proposed acquisition of Warner Bros. Discovery, concluding the transaction is not likely to harm competition or American consumers.

The Antitrust Division said its eight-month review examined more than two million documents and found the deal could strengthen competition across the media and entertainment industry, including in streaming video, traditional television and theatrical film distribution.

"The extensive investigatory record reviewed by the Division suggests that the impact of the transaction will be to increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers," the department said.

The DOJ said the combined company would continue competing against larger streaming rivals including Netflix, Amazon and Disney and found no evidence the transaction would likely reduce consumer choice.

WARNER BROS DISCOVERY SHAREHOLDERS APPROVE PARAMOUNT SKYDANCE DEAL

The merger was approved by the Department of Justice on Friday. (Eric Thayer/Bloomberg via Getty Images)

The department also disclosed that regulators reviewed a separate proposal involving Netflix before Paramount reached a definitive agreement with Warner Bros. Discovery. 

According to the DOJ, evaluating both proposals provided investigators with competing perspectives on the future of the media industry.

Ticker Security Last Change Change % PSKY PARAMOUNT SKYDANCE CORP. 10.47 -0.02 -0.19% WBD DISCOVERY INC. 26.98 +0.12 +0.45% NFLX NETFLIX INC. 80.34 -0.93 -1.14% The decision drew criticism from Sen. Elizabeth Warren, D-Mass., who urged state attorneys general to continue fighting the transaction.

GSA SELLS OLD POST OFFICE BUILDING IN WASHINGTON, ONCE HOME TO TRUMP HOTEL

"This is terrible news for every American who doesn't want Trump-aligned billionaires to control what they watch and how much they pay," Warren wrote on X.

OPENAI SIGNALS POTENTIAL STOCK MARKET DEBUT WHILE WEIGHING PRIVATE-COMPANY ADVANTAGES

Netflix agreed last year to acquire Warner Bros. Discovery's film and television studios and streaming platform, HBO Max, in a cash-and-stock deal valued at $27.75 per Warner Bros. Discovery share.  (Anna Barclay/Getty Images / Getty Images)

Warren also alleged the merger "reeked of corruption and influence-peddling" and called on state officials to block the deal.

State attorneys general retain independent authority under antitrust laws, and the DOJ's decision does not itself prevent additional legal challenges to the proposed transaction.

The merger still faces several hurdles to reach completion. (Mario Tama/Getty Images / Getty Images)

The merger still faces several steps before completion.

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Paramount announced Friday that it had extended debt exchange and tender offers connected to Warner Bros. 

Discovery and said it expects those offers to remain aligned with the anticipated closing timetable. The company also cautioned that the acquisition remains subject to closing conditions and other risks.

With the DOJ expected to approve the $110 billion Hollywood megamerger, political concerns over turmoil at Paramount's CBS may push Democratic AGs to act, experts say.

David and Larry Ellison have bought Paramount and are now waiting for regulators to sign off on their plan to buy Warner Bros. Discovery. Eric Charbonneau/Getty Images for The Hollywood Reporter Lots of people have objected to Paramount's planned purchase of Warner Bros. Discovery.

Some of those people are antisemitic, says Paramount's top lawyer.

In an interview with the Los Angeles Times, Makan Delrahim, Paramount's chief legal officer, said that some opposition to the Paramount/WBD deal is coming from people with "antisemitic views."

"Let's be honest," he told the Times. "There's a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction, really because of their own antisemitic views. Regulators and law enforcement officials will see right through that."

What does Delrahim mean by that?

Paramount declined to comment. I've also asked Delrahim to expand on his remarks. In the absence of an explanation, the only plausible answer I can think of is that Paramount owners Larry and David Ellison are active supporters of Israel, and Delrahim is suggesting that some people who are critical of the Ellisons' pro-Israel stance are also antisemitic.

This isn't the first time the issue of Israel has come up since the Ellisons bought Paramount: Last fall, Paramount denounced a campaign, signed by some high-profile actors and filmmakers, not to work with some Israeli film organizations. Paramount said the campaign amounted to "silencing individual creative artists based on their nationality."

Paramount's statement generated a response from a group of anonymous Paramount employees, who said the company was siding with "systems of apartheid, occupation, and … a genocide in Gaza and of the Palestinian people."

Debates over the Israeli-Palestinian conflict — and whether criticizing Israel's actions in that conflict equates to antisemitism — are long-standing and highly charged. Which is why it's so striking to see Delrahim, who is meant to shepherd the Paramount/WBD through a thicket of regulators around the world, seemingly connect it to his proposed deal.

Maybe there's some 4-D chess I'm missing here. But it looks like Delrahim — who has spent a lot of time working in Washington, most recently as head of antitrust enforcement at the Department of Justice during Donald Trump's first term — may be making his would-be deal that much harder to get over the line.

Let's say you're a regulator who questions the wisdom of that combination —perhaps you're worried about what it means for the theatrical movie business, or what it might mean for journalism if CBS and CNN are combined. But now Paramount's lawyer is suggesting that your concerns are really a cover for your theoretical antisemitism.

That may not matter when it comes to the Trump administration, which is widely expected to sign off on the transaction. But it's hard to see how this is helpful anywhere else.

Read next

Peter Kafka You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Peter covers media and technology for Business Insider; previously he has worked at Vox, Recode, AllThingsD, and Forbes. He was also the first hire at Silicon Alley Insider, Business Insider's predecessor. 

Politics

It has been about a month since the last earnings report for Warner Bros. Discovery (WBD - Free Report) . Shares have lost about 0.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Warner Bros. Discovery due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

Warner Bros. Discovery Q1 Loss Wider Than Expected, Revenues Fall Y/YWarner Bros. Discovery reported a first-quarter 2026 loss of $1.17 per share, missing the Zacks Consensus Estimate of a loss of 10 cents. The company had reported a loss of 18 cents per share in the year-ago quarter. The quarter's reported GAAP loss was substantially inflated by a $2.8 billion termination fee paid to Netflix in connection with the pending merger with Paramount Skydance Corporation, as well as $1.3 billion in pre-tax acquisition-related amortization and restructuring charges.

Revenues decreased 1% year over year to $8.89 billion, missing the Zacks Consensus Estimate by 0.41%.

Distribution revenues were down 1% ex-forex to $4.91 billion, as underlying growth in global streaming subscribers was offset by continued domestic linear pay TV subscriber declines and the impact of the HBO Max domestic distribution deal renewal with a former related party. Advertising revenues decreased 8% ex-forex year over year to $1.85 billion, as ad-lite streaming subscriber growth was more than offset by the absence of the NBA and continued domestic linear audience declines; the absence of the NBA negatively impacted the year-over-year growth rate by 7% ex-forex. Content revenues were relatively unchanged year over year at $1.89 billion, as higher intercompany content revenues at the Studios segment were offset by higher intercompany eliminations.

WBD ended the first quarter of 2026 with more than 140 million global streaming subscribers, meaningfully exceeding its own guidance threshold and up 14% year over year. Beginning with first-quarter 2026, WBD no longer reports granular subscriber metrics or ARPU on a quarterly basis.

WBD's Q1 2026 DetailsThe Streaming segment reported revenues of $2.89 billion, up 7% ex-forex year over year. Distribution revenues rose 7% ex-forex, driven by continued subscriber growth in existing markets and the global expansion of HBO Max through new distribution deals, partially offset by the domestic distribution deal renewal with a former related party. Advertising revenues increased 19% ex-forex, primarily reflecting growth in global ad-lite subscribers, despite a 5% ex-forex headwind from the absence of the NBA. Streaming Adjusted EBITDA increased 17% ex-forex to $438 million from $339 million in the year-ago quarter, driven by robust topline growth that more than offset higher marketing and content investment tied to HBO Max's international launches.

The Studios segment reported revenues of $3.13 billion, up 31% ex-forex year over year. Content revenues rose 33% ex-forex, with TV revenues increasing 58% ex-forex, primarily driven by higher intercompany content licensing to support HBO Max's international rollout and higher third-party licensing, while theatrical revenues advanced 21% ex-forex on a similar dynamic. Games revenues decreased 30% ex-forex on lower library revenues. Studios Adjusted EBITDA increased 156% ex-forex to $775 million from $259 million in the prior-year quarter, reflecting the step-change benefit of accelerated intercompany content licensing. On a full-year 2026 basis, Studios Adjusted EBITDA is expected to be roughly in line with 2025.

The Global Linear Networks segment reported revenues of $4.38 billion, down 9% ex-forex year over year. Distribution revenues declined 8% ex-forex, primarily driven by a 10% decrease in domestic linear pay TV subscribers, partially offset by a 2% increase in domestic affiliate rates. Advertising revenues fell 12% ex-forex, with the absence of the NBA accounting for 7% of that decline alongside 8% domestic audience declines; underlying advertising trends nevertheless improved 200 basis points sequentially. Global Linear Networks Adjusted EBITDA decreased 10% ex-forex to $1.63 billion from $1.79 billion in the year-ago quarter, though cost discipline helped partially cushion the impact as operating expenses declined 9% ex-forex.

Total Adjusted EBITDA for the first quarter of 2026 was $2.20 billion, roughly flat ex-forex year over year, as gains in the Streaming and Studios segments were offset by the decline in the Global Linear Networks segment.

WBD's Balance Sheet & Cash FlowWarner Bros. Discovery ended the first quarter of 2026 with cash and cash equivalents of $3.26 billion, compared with $4.57 billion as of Dec. 31, 2025. As of March 31, 2026, the company's $4 billion revolving credit facility remained undrawn. WBD had $3.85 billion drawn on its revolving receivables program, a $150 million increase versus the fourth quarter of 2025. Gross debt stood at $33.4 billion with net leverage of 3.4x compared with 3.3x at the end of the fourth quarter of 2025.

First-quarter 2026 operating activities used $208 million in cash, compared with cash provided of $553 million in the prior-year quarter. Free cash flow decreased to negative $476 million from $302 million a year ago, primarily driven by higher net content investment across the Streaming and Studios segments, higher tax payments and working capital timing, partially offset by lower cash interest payments. Free cash flow was unfavorably impacted by approximately $100 million of separation and transaction-related items. WBD repaid $123 million of Senior Notes during the quarter.

Q2 & 2026 Guidance by WBDWBD remains on track to surpass 150 million global streaming subscribers by the end of 2026.

For the second quarter, the absence of the NBA is expected to represent a 20% ex-forex headwind to advertising revenues in the Global Linear Networks segment, partially offset by a net 400 basis point benefit from the NCAA March Madness Final Four and Championship broadcast.

The previously disclosed domestic distribution deal renewal, which has weighed on distribution revenue growth, is expected to be lapped by the end of May 2026.

For Studios, the second quarter will face a difficult comparison against A Minecraft Movie, Sinners and Final Destination: Bloodlines from the prior-year period.

The pending acquisition of WBD by Paramount Skydance Corporation received shareholder approval on April 23, 2026 and is expected to close during the third quarter of 2026. WBD expects to incur additional transaction-related cash costs through the close of the transaction.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -88.1% due to these changes.

VGM ScoresCurrently, Warner Bros. Discovery has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Warner Bros. Discovery has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerWarner Bros. Discovery is part of the Zacks Broadcast Radio and Television industry. Over the past month, Sirius XM (SIRI - Free Report) , a stock from the same industry, has gained 3.9%. The company reported its results for the quarter ended March 2026 more than a month ago.

Sirius XM reported revenues of $2.09 billion in the last reported quarter, representing a year-over-year change of +1.1%. EPS of $0.72 for the same period compares with $0.59 a year ago.

For the current quarter, Sirius XM is expected to post earnings of $0.78 per share, indicating a change of +36.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Sirius XM. Also, the stock has a VGM Score of A.

CBS News boss Bari Weiss is likely to gain editorial oversight of CNN if and when Paramount Skydance’s acquisition of Warner Bros. Discovery is approved, according to a report.

Paramount executives are said to have held preliminary discussions with several candidates who would come in and run the business-side operations next to Weiss while she continues to oversee editorial.

The company is considering several big names, including current CNN CEO Mark Thompson, NBCUniversal News Group chairman Cesar Conde and former NBC News chief Noah Oppenheim, Axios reported.

CBS News editor-in-chief Bari Weiss could see her influence expand significantly once the Paramount Skydance-Warner Bros. Discovery merger is approved, according to a report. Los Angeles Times via Getty Images Ben Sherwood, currently CEO of Daily Beast, and former CBS News president David Rhodes are also under consideration, according to the report.

The search implies that once the merger goes through, Weiss will also be put in charge of CNN’s editorial operations, Axios said.

A CNN spokesperson declined to comment. The Post has sought comment from Oppenheim, Sherwood and NBC News.

A spokesperson for Rhodes declined to comment.

All five candidates have extensive experience running large news organizations, a contrast with Weiss, whose background is in print and digital journalism rather than television news management.

Under the current org chart, Tom Cibrowski is president of CBS News. He reports to Paramount television chief George Cheeks, while Weiss reports directly to Paramount Skydance CEO David Ellison.

Last month, Puck News reported that Paramount executives began informal discussions about scaling back Weiss’ role and bringing in a more experienced hand to manage the business side of both CBS News and CNN.

CNN chief executive Mark Thompson is among the media executives reportedly under consideration for a senior role in a combined CBS News-CNN operation. Getty Images for Warner Bros. Discovery According to Puck, the executive would be brought in to allow Weiss to focus on scaling the company’s digital operations.

A Paramount spokesperson denied the report.

According to Axios, Ellison couldn’t be more pleased with Weiss’ performance thus far.

“The Paramount brass loves Bari Weiss,” a source told the news site.

“She has the full confidence of David Ellison, who believes Bari has done a fantastic job as editor-in-chief.”

The source told Axios that “Bari has been involved with identifying people she would partner with on the business side.”

Paramount Skydance CEO David Ellison is reportedly exploring a new leadership structure that could place CNN and CBS News under a unified news operation. Chris Pizzello/Invision/AP The prospect of Weiss overseeing editorial operations across both CBS News and CNN would represent a remarkable expansion of her influence less than a year after she was brought in to run CBS News.

Weiss, 42, was installed as CBS News editor-in-chief after Ellison’s media company, Skydance, merged with Paramount last year.

Since taking over the helm of the Tiffany Network’s news division, however, Weiss has made changes that have ruffled feathers — nowhere more visibly than at “60 Minutes,” the long-running television newsmagazine.

Last month, Weiss fired the show’s executive producer, Tanya Simon, and two correspondents, Sharyn Alfonsi and Cecilia Vega.

She then installed Nick Bilton, a tech reporter whose bylines appeared in Vanity Fair and the New York Times, as the show’s new executive producer.

NBCUniversal News chair Cesar Conde’s name has surfaced as Paramount weighs candidates to help oversee a combined television news division. Getty Images for TIME Last week, Scott Pelley, the veteran “60 Minutes” correspondent, was fired after he angrily confronted Bilton over the firings.

The show’s three remaining correspondents — Lesley Stahl, Jon Wertheim and Bill Whitaker — announced that they would remain with the program, though they were critical of management’s handling of the firings.

The Post has sought comment from CBS News and Paramount.

Paramount Skydance’s proposed acquisition of Warner Bros. Discovery has not yet closed, though both companies have said they expect the roughly $110 billion deal to be completed in the third quarter of 2026, pending regulatory approvals and any legal challenges.

Warner Bros. Discovery shareholders have already approved the transaction, but the merger still faces scrutiny from antitrust regulators and California Attorney General Rob Bonta, who has said his office is reviewing the deal.

The Department of Justice has approved Paramount‘s $111 billion purchase of Warner Bros Discovery.

A very early birthday present to CEO David Ellison, the anticipated sign-off by the Para-friendly Trump administration has been confirmed to Deadline by multiple sources. There appear to be no significant concessions by Paramount to the DOJ to get the deal done, we hear.

The big hurdle cleared by Para Friday comes as state attorneys general in California, New York and almost a dozen other states are contemplating an antitrust suit to put the brakes on such a mega-studio.

With news of the approval leaking out fast on Friday, Paramount themselves had no comment on the matter. Earlier today, the company and the UFC (who have a $7.7 billion deal of their own with Paramount) got a gift when a federal judge killed an 11th hour lawsuit to stop the Octagon matches set for Trump’s 80th birthday at the White House on June 14.

A Los Angeles billboard for UFC at the White House Dominic Patten/Deadline Among opponents to the merger, Sen. Elizabeth Warren has been in the forefront, and Friday she was quick to react to DOJ green light. “This is terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay,” the New England senator said. “The Paramount-Warner Bros. deal has reeked of corruption and influence-peddling. This fight isn’t over. State AGs must block this merger.”

Out West, Golden State AG Rob Bonta’s office has long stuck to its line that the “Paramount acquisition of Warner Brothers remains an active investigation, and we do not have any updates to share at this time.” To that, the CA DOJ did not respond to Deadline’s request for comment today.

Overseas, the much debated deal is hitting some roadblocks with UK regulators.

Earlier this week, the Competition and Markets Authority declared that it had opened a “merger inquiry” into the deal. With an August 7 deadline of sorts, the CMA intends to examine if Paramount-WBD meld could present a “realistic prospect of a substantial lessening of competition.” If the Brits believe that such a prospect is real, then a second phase in their probe will kick off — a Phase 2 that could last up to five months and gummy up the works for the merger.

After a months-long death match with Netflix, a bid-raising Paramount succeeded in efforts to acquire Warner Bros. Discovery in late February as streamer co-CEO Ted Sarandos was literally at the White House for meetings. Soon after, Team Ellison said it expected to close the matter in the third quarter, which would have been a remarkably quick turnaround of a deal this size.

A turnaround that looks to be well on track now, at least in America.

Additionally, even as Australia signed off just recently on the deal, more antitrust work is ongoing in the European Union, where a Phase 1 investigation is underway with a deadline of July 7. Experts have predicted a Phase 2 investigation is likely.

Separately, the European Commission is examining the deal under Foreign ⁠Subsidies Regulations and will decide by July 14 whether to ​clear it or open a full investigation. Saudi Arabia’s Public Investment Fund, Qatar Investment Authority and Abu Dhabi’s L’imad Holding are providing $24 billion in equity funding, joining the Ellisons, RedBird Capital and LionTree as investors. Paramount says the Middle Eastern sovereign wealth funds will be purely passive investors.

Back here in the USA, where the Ellisons’ closeness to “good friend” Donald Trump has cast a shadow on the merits of the widely disruptive merger, Democratic lawmakers have asked Treasury Secretary Scott Bessent, in his role as Chair of the Committee on Foreign Investment in the United States (CFIUS), to review potential national security risks of foreign ownership. One issue some have raised is a Congressionally mandated 25% cap on foreign ownership of American broadcast stations.

The Justice Department’s approval was expected, which is why many opponents of the transaction had set their sights on state attorneys general. Still, the DOJ’s decision to sign off on the merger could have an impact on a state legal challenge, as judges may question why the transaction is problematic at the state level but not for federal authorities.

Democrats have charged that the DOJ has been politicized, including on antitrust matters. They have pointed to the Ellisons’ ties to the administration, and to corporate lobbying from officials close to the White House on another merger and antitrust lawsuit.

Politico was first to report on the DOJ approval of the Paramount-WBD merger.

Ted Johnson contributed to this report.