Warner Bros. Discovery (WBD, Financials), the media and entertainment company behind Warner Bros., HBO, CNN and Discovery, edged lower Monday after a report said California hired a law firm for a possible lawsuit over its planned sale to Paramount Skydance.
The stock fell 0.4% after CNBC reported that California had brought in outside legal help. The move does not guarantee a lawsuit, but it could increase the risk of another challenge to the $110 billion transaction.
Paramount Skydance has already offered concessions to address European Union antitrust concerns. In the U.K., an official also said she is considering whether to intervene on public interest grounds.
The deal has cleared U.S. federal antitrust review, and the companies are still aiming to close in late summer 2026, subject to remaining approvals and conditions.
For investors, the issue is timing and execution. More legal or regulatory pressure could slow the process, even if it does not stop the deal.