PSKY-WBD: Closing could be delayed, not derailed

Research evidence excerpt

PSKY-WBD: Closing could be delayed, not derailed

16 July 2026

US Media & Telecom

The anticipated legal challenge to the proposed PSKY-WBD merger has finally arrived. Laurent Yoon

+1 917 344 8502 This is hardly a surprise and investor concerns in anticipation of state-level opposition have

laurent.yoon@bernsteinsg.com weighed on the stock for weeks, with shares trading into the “9-handle” before the official

announcement.

Martin Boruchowicz

+1 917 344 8564 While the lawsuit is clearly not a positive catalyst, we think it does remove a significant martin.boruchowicz@bernsteinsg.com

overhang by providing greater clarity on the states’ arguments. At its core, the challenge

Andrew Chung is an antitrust case asserting that the combined company would wield excessive market

+1 917 344 8302 power across linear and film distribution. That position stands in contrast to the DOJ’s

andrew.chung@bernsteinsg.com approval of the transaction in June. From our perspective, we do not find states arguments

sufficiently compelling to block a merger between two structurally challenged media

companies. We believe the merger creates a NewCo better positioned to compete in an

industry where scale in streaming is a requirement not only for success, but for long-term

survival.

The combined company does not create a dominant position. The central issue with

the states’ argument is that neither company enters this merger from a position of strength.

PSKY/PARA and WBD have both spent years grappling with secular industry pressures

such as cord-cutting, rising content costs, and the transition from Linear to Streaming.

The merger does create a larger competitor, but size alone is not evidence of market

position. Neither company has possessed the scale necessary to compete effectively