Subscribers seek court order to keep Paramount+ and HBO Max operating separately

Five Paramount+ subscribers asked a federal judge on Oct. 16 to force Skydance Corporation to keep Paramount+ and HBO Max operating as separate businesses while their antitrust case proceeds, a fresh legal challenge to the $110 billion media combination that closed less than two weeks ago. The 16-page preliminary injunction motion, filed in the U.S. District Court for the Northern District of California, does not seek to unwind the merger itself. Instead, it asks the court to preserve the two streaming services as distinct operations so that a full breakup remains possible if the plaintiffs eventually win their case.

The filing lands at a rocky moment for the newly combined company. Skydance shares were trading under $7 on Monday, near a 52-week low, as investors continue to digest the debt load and dilution that came with swallowing Warner Bros. Discovery.

What the filing asks for

The plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — are represented by the Bay Area's Alioto Law Firm and Foreman & Brasso. Their motion is a refiling of an earlier, April-filed case that Judge Araceli Martínez-Olguín dismissed for lack of standing, with leave to try again. The new filing states:

"Plaintiffs request an order requiring Defendants Paramount Skydance Corporation and Skydance Media, LLC to hold and operate separately, pending final adjudication or further order, the acquired Warner Bros. Discovery businesses and assets necessary to preserve viable independent HBO Max and Paramount+ services, together with identifiable associated film and national-news operations, so the Court may order effective divestiture if Plaintiffs prevail. Plaintiffs seek preservation of separate operations and relief against irreversible integration, not rescission of the completed closing."

The motion points to last week's price increase on the standalone Discovery+ service as an early sign of the competitive harm it says the merger threatens. Plaintiffs are seeking a Dec. 3 hearing before Martínez-Olguín, the same judge who signed off on a separate antitrust settlement that cleared the way for the deal to close.

The numbers behind the deal

Paramount's acquisition of Warner Bros. Discovery, valued at roughly $110 billion in equity and about $111 billion including assumed debt, closed Oct. 6. The combined company changed its name from Paramount Skydance Corporation to Skydance Corporation that day, moving its Class B shares from the Nasdaq, where they traded as PSKY, to the New York Stock Exchange under the new ticker SKYD.

The combination left Skydance with pro forma net debt of roughly $78.9 billion. A week after closing, the company distributed nearly 470.7 million warrants to Class B shareholders of record as of Oct. 5, according to a securities filing, each letting the holder buy one additional share at $12 through October 2036. Full exercise of the warrants could raise about $5.65 billion for the company but would also dilute existing shareholders, a prospect that sent the stock down as much as 22% in a single session that week. Shares have not fully recovered: Skydance was trading near $10 when the merger closed and was changing hands under $7 Monday afternoon, down roughly 3% on the day and well off the $17 high the stock touched after the original Paramount-Skydance tie-up closed last year.

The streaming businesses at the center of the dispute are themselves outsized: Paramount+ counts roughly 79 million subscribers, while HBO Max has close to 140 million. Chairman and chief executive David Ellison has said the plan is eventually to combine them into a single service.

How the fight got here

The private subscriber suit is the longer-running of two major legal challenges that have dogged the deal. A coalition of 12 Democratic state attorneys general, led by California's Rob Bonta, sued in July to block the acquisition under Section 7 of the Clayton Act, arguing it would reduce competition in theatrical film distribution and cable licensing. A federal judge issued a temporary restraining order that July, and the companies subsequently agreed not to close the deal until a court ruling or June 2027, whichever came first.

That stalemate broke on Sept. 21, when the states reached a settlement with Ellison — one that drew criticism from some merger opponents — clearing a path to close. Separately, the Writers Guild of America has pressed its own challenge over the deal's effect on writers' jobs and pay. And on Oct. 5, the day before closing, Justice Elena Kagan denied an emergency application from Faust asking the Supreme Court to intervene, clearing the final obstacle to the Oct. 6 close.

• April 2026: Faust and four co-plaintiffs file their original antitrust suit as Paramount+ subscribers.
• July 2026: Twelve state attorneys general sue separately; a judge temporarily blocks the merger.
• Sept. 21, 2026: States settle with Paramount Skydance, clearing a path to close.
• Oct. 5, 2026: Supreme Court declines to block the deal.
• Oct. 6, 2026: Merger closes; company renamed Skydance Corporation.
• Oct. 13, 2026: Skydance issues warrants; shares fall sharply.
• Oct. 16, 2026: Plaintiffs refile seeking the separation order.

Who is affected, and what comes next

The outcome matters most immediately to the roughly 220 million combined subscribers of Paramount+ and HBO Max, who would face a different competitive landscape depending on whether the services stay separate or merge, as well as to employees across CBS, CNN, Warner Bros., Nickelodeon and the other properties now under one roof, many of whom are watching for signs of how aggressively the combined company will cut costs to manage its debt load.

Ellison, for his part, has been candid about the eventual destination for the two streamers even as the legal fight continues. "Long-term, the plan is basically to bring them together," he told reporters at a press conference shortly after the deal closed, adding: "I can't be specific about that yet today." Skydance did not respond to a request for comment on the latest filing, according to Deadline's report on the motion.

The broader antitrust case tied to the states' now-settled lawsuit is set for a dismissal hearing Wednesday before Martínez-Olguín — the same judge who will hear the new preliminary injunction request in December. The timing means Skydance's leadership will be managing two separate fronts in the same courtroom while also preparing to report quarterly earnings for the first time as a combined company, on a date not yet announced. Investors are expected to press Ellison and co-chief executive Ynon Kreiz for specifics on how they intend to pay down the debt and deliver the more than $6 billion in annual cost savings the company has promised over three years — the same financial pressures that are now intersecting with a courtroom fight over how fast, and how far, the integration can go.