The latest court filing comes as the David Ellison-led conglomerate grapples with a struggling share price, substantial debt obligations and plans to attract additional equity investors to strengthen its financial position following the completion of its $111 billion merger with Warner Bros. Discovery (WBD).
In a preliminary injunction motion filed on October 16, five plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — asked the court to preserve the two streaming services as separate businesses while their legal challenge proceeds.
The plaintiffs argued that maintaining the services independently would protect the court’s ability to order a possible divestiture if they ultimately prevail in the case.
“Plaintiffs seek preservation of separate operations and relief against irreversible integration, not rescission of the completed closing,” the motion stated.
The filing acknowledges that the merger has already been completed but contends that the court should retain the power to impose an effective remedy should the plaintiffs establish that the transaction violates antitrust law.
“The question now is whether the Court will preserve its power to afford an effective remedy,” the document added.
The plaintiffs have requested a December 3 hearing before US District Judge Araceli Martínez-Olguín to consider their application for preliminary relief. Their nine-point proposed order seeks to prevent the merged company from dismantling the separate operations of the streaming platforms and other specified businesses while the litigation continues.
Under the proposal, Paramount Skydance would be required to maintain identifiable operational functions for its legacy streaming business and the acquired WBD streaming operations. The company would also have to preserve records detailing each business's revenues, expenditures, subscribers, contractual rights, content rights and material assets.
The motion specifically seeks to prevent the company from eliminating either standalone subscription service or forcing subscribers to migrate to a single replacement platform.
“Separate operation. Defendants shall maintain separate identifiable operational functions for the Legacy Paramount Streaming Business and the Acquired Streaming Business,” the proposed order states.
If granted, the injunction could complicate management's plans to combine the two platforms and pursue cost savings through a unified streaming operation.
Ellison has previously confirmed that the company intends to bring Paramount+ and HBO Max together following a period in which the services will be bundled.
“Long-term, the plan is basically to bring them together,” Ellison said at a post-merger press conference. He added at the time: “I can’t be specific about that yet today.”
The proposed integration would bring Paramount's television and film franchises, including Taylor Sheridan's productions, together with HBO's programming, which includes Game of Thrones spin-offs and Lanterns. However, the subscribers' legal action seeks to preserve the services as distinct businesses while the court considers the antitrust implications of the merger.
The case follows an earlier lawsuit filed in April, which Judge Martínez-Olguín dismissed on the grounds that the plaintiffs lacked standing to bring the action. The judge nevertheless permitted them to refile, leading to the latest motion through the San Francisco-based Alioto Law Firm and Foreman & Brasso.
The renewed challenge comes as a separate antitrust proceeding involving the merger approaches a dismissal hearing. Martínez-Olguín also approved a September 21 settlement between Ellison and a coalition of 12 Democratic-led state attorneys general in their own antitrust dispute over the transaction.
The subscribers' latest filing does not seek to reverse the completed merger outright. Instead, it focuses on preventing the immediate integration of key businesses while leaving open the possibility of a future divestiture.
A preliminary injunction would potentially constrain Ellison and newly appointed Skydance co-CEO Ynon Kreiz as they seek to manage the merged company's estimated $80 billion debt burden. Preserving separate streaming operations could also limit the company's ability to implement some integration measures and associated cost reductions while the case remains pending.
Financial pressures have added urgency to the company's efforts to establish a clear strategy for its combined operations. After beginning trading as a merged entity, Paramount Skydance shares came under pressure, trading below $7 at midday Monday, down approximately 3% during the session. The stock had approached $10 around the time the merger closed, while the company's reported 52-week high stood at $17 in the autumn of 2026.
With the next earnings season approaching, investors are expected to seek greater clarity on management's plans for reducing debt, improving the company's financial performance and integrating the acquired businesses. The company is expected to face questions from Wall Street in the coming weeks, although an earnings date had not yet been announced.
The transaction, one of the largest leveraged buyouts in corporate history, has placed debt management and the prospect of additional investment at the centre of scrutiny surrounding the new conglomerate. Rising interest rates have further heightened concerns about the cost of servicing substantial borrowings.
Paramount Skydance did not respond on Monday to a request for comment on the latest court filing.
The outcome of the injunction request could shape the pace and structure of the company's streaming strategy as the legal proceedings continue, potentially forcing management to balance its plans for operational integration against the requirement to preserve the businesses while the court considers the plaintiffs' claims.