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The media industry may be entering a period of slower mergers and acquisitions as increased regulatory scrutiny creates uncertainty surrounding major deals, CNBC reports.
Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery has been delayed until as late as June 2027 because of an antitrust lawsuit brought by several state attorneys general.
Although the deal has received approval from global regulators, including the U.S. Department of Justice, the ongoing state challenge demonstrates that large transactions can still face significant obstacles even after federal approval. This uncertainty could affect other major deals, including Fox’s planned $22 billion acquisition of Roku and potential future transactions involving Comcast and NBCUniversal.
Companies may become more hesitant to pursue large acquisitions if they believe state regulators could delay or challenge them for months. The situation could also change the economics of deals, as delays can create substantial costs.
Paramount, for example, may owe Warner Bros. Discovery shareholders roughly $650 million per quarter while the transaction is delayed. As a result, media companies may increasingly turn to alternatives such as partnerships, streaming bundles, content agreements and investments in creators and intellectual property rather than full-scale acquisitions.
Partnerships such as Peacock’s agreement with YouTube could become more common as companies seek to expand their reach without triggering the regulatory concerns associated with mergers.
