Paramount Skydance has agreed to pause its megamerger with Warner Bros. Discovery until five days after the antitrust cases are resolved, or until June 1, 2027, whichever comes first, the company said Friday.

Paramount faces an antitrust lawsuit from 12 U.S. states and a legal challenge from the Writers Guild of America.

This decision means that Paramount will almost certainly go to court to defend its deal to acquire WBD, unless a deal is reached. That will likely mean a delay of months.

David Ellison’s media company had hoped to close its deal with WBD in mid-July. Paramount agreed to pay WBD shareholders a so-called “ticking fee” of about $7 million each day the deal does not close, starting Sept. 30. Paramount attorney Jeffrey Kessler told the judge at a hearing that the company would “suffer very serious harm” if it had to pay the ticking fee, which is $650 million per quarter.

Some of the 12 Paramount employees Business Insider spoke to earlier this week said they were concerned about what a delay in the WBD deal would mean for the company’s financial health.

“I’m definitely worried about the impending layoffs after the merger,” said one Paramount worker. “But I’m worried about the entire company if it doesn’t come to fruition.”

A Paramount spokesperson said in a statement that this agreement “is the fastest and clearest way to demonstrate that this transaction is good for competition, good for consumers and good for creators, a conclusion that has already been reached by dozens of competition authorities around the world.”

Paramount’s WBD deal received approval from the US Department of Justice, the European Union and other global regulators.

Forrester research director Mike Proulx said Paramount’s WBD deal “just got longer, more complicated and probably more expensive.”

“I’m not sure how Paramount can frame this as a victory when the deal became more uncertain than it was 24 hours ago,” Proulx said. “The timeline is now out of Paramount’s control.”

Shares of Paramount and WBD fell on the news. Paramount shares ended the day down 3.3%, while WBD shares fell about 0.7%.

‘Tired of mergers and chaos’

The states that sued to stop Paramount’s acquisition of WBD said the deal raised antitrust concerns in three markets: wide-release movie distribution, big-budget movie distribution and cable network licenses.

With WBD, Paramount would control two of the major film studios: Paramount Pictures and Warner Bros. Studios; Television networks such as HBO, CBS and CNN; and streaming services Paramount+, Pluto TV and HBO Max.

Paramount’s spokesman said these merger concerns “are unrelated to current market realities and cannot withstand scrutiny,” adding that the company would “look forward to proving our case at trial.”

California Attorney General Rob Bonta said on social media that the agreement to suspend the merger was “great news for the public, movie theaters and the many people who write, build and create the art, news and entertainment that many of us enjoy.”

Staff at Ellison’s company have been nervous about the WBD deal and antitrust challenges.

Some told Business Insider they believed the deal would improve their job security as Paramount grew stronger, while others thought the merger would result in an overlap that could put their roles at risk.

A Paramount streaming employee in favor of the deal said they “view Paramount the same way they do Spirit Airlines. Regulators wouldn’t let JetBlue and Spirit Airlines merge. Now Spirit is bankrupt and JetBlue is struggling.”

One Paramount streaming staffer who didn’t like the deal said they were “tired of the mergers and chaos.”