In addition to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025 (filed with the Securities and Exchange Commission on February 25, 2026), the following risks relating to the WBD Merger could adversely affect our business, financial condition or results of operations before and after the completion of the WBD Merger. Risks Relating to the WBD Merger The proposed WBD Merger may cause disruption in our and WBD’s business and commercial relationships. The proposed WBD Merger could cause disruptions to our business or commercial relationships, or those of WBD, which could have an adverse impact on our and WBD’s business, financial condition or results of operations. Parties with which we or WBD have business relationships may experience uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we or WBD otherwise may have sought to establish business relationships may seek alternative relationships with third parties. We have experienced, and may continue to experience, negative publicity relating to the WBD Merger, which could have an adverse effect on our or WBD’s ongoing operations including, but not limited to, retaining and attracting employees and creative talent, maintaining our relationships with existing customers and obtaining potential new customers. We compete with other content creators for creative talent, including producers, directors, actors and writers and if we fail to retain or attract new key employees or creative talent, our business, financial condition or results of operations could be adversely affected. The pursuit of the WBD Merger and the preparation for the integration of WBD may place a significant burden on our management and internal resources. The diversion of management’s attention away from day-to-day business concerns and any difficulties encountered in the transition and integration process could adversely affect our business, financial condition or results of operations. Failure to consummate the WBD Merger could negatively impact our business, financial condition, results of operations and stock price. The WBD Merger cannot be consummated until conditions to Closing (as defined in the WBD Merger Agreement) are satisfied or, if permissible under applicable law, waived. The WBD Merger is subject to numerous Closing conditions, including the receipt of required regulatory approvals and the absence of any orders enjoining the consummation of the WBD Merger. See “—The WBD Merger is subject to a number of Closing conditions and, if these conditions are not satisfied, the WBD Merger Agreement may be terminated in accordance with its terms and the WBD Merger may not be consummated. In addition, the parties have the right to terminate the WBD Merger Agreement under certain circumstances, in which case the WBD Merger would not be consummated.” There can be no assurance that the conditions to completion of the WBD Merger, including the receipt of required regulatory approvals, will be satisfied or waived on a timely basis or at all. Further, there can be no assurance that governmental authorities will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or preventing consummation of the WBD Merger. For example, in July 2026, twelve states (California, Arizona, Colorado, Connecticut, Massachusetts, -90- Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington) filed an antitrust action in the U.S. District Court for the Northern District of California against Paramount and WBD relating to the WBD Merger, seeking to block the WBD Merger, among other relief. On July 24, 2026, we entered into a stipulation agreeing that the WBD Merger will not close, and we will not take any steps to integrate the operations of Paramount with those of WBD, until the earlier of five days following the court’s ruling or June 1, 2027. If in connection with any of the above or otherwise, WBD or Paramount is required to divest assets or businesses or to agree to other conditions, obligations or restrictions on the conduct of its business, there can be no assurance that we or WBD will be able to negotiate such divestitures or other measures expeditiously or on favorable terms or that the governmental authorities will approve the terms of such divestitures or other measures. In addition, we can provide no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment of the WBD Merger. If the conditions to completion of the WBD Merger are not satisfied or waived, we may be unable to complete the WBD Merger in the time frame or manner currently anticipated or at all. If the WBD Merger is not completed by September 30, 2026, we have agreed in the WBD Merger Agreement to pay as merger consideration to WBD stockholders an additional amount in cash equal to $0.00277778 multiplied by the number of calendar days elapsed after September 30, 2026, to and including the closing date (which, for the avoidance of doubt, will not exceed $0.25 per 90 calendar day period). The anticipated closing of the WBD Merger has been delayed as a result of the lawsuit described above, with the parties agreeing to postpone closing until the earlier of five days following the court’s ruling or June 1, 2027. Additionally, if the WBD Merger is not completed, our ongoing business may be adversely affected and we will be subject to several risks or consequences, including: •if the WBD Merger Agreement is terminated under certain circumstances, including where required regulatory approvals have not been obtained or because a court order prevents the WBD Merger from closing on antitrust grounds, we may be required to pay WBD a $7.0 billion Regulatory Termination Fee (as defined in the WBD Merger Agreement), the payment of which would likely require us to issue additional equity pursuant to the Subscription Agreements, with corresponding dilution to our existing stockholders; •we will be required to pay certain costs relating to the WBD Merger, whether or not the WBD Merger is consummated, such as significant fees and expenses relating to financial advisory, legal, accounting, consulting or other advisory fees or expenses, employee-benefit or related expenses, regulatory filings or filing and printing fees, none of which we would be able to recover; •matters relating to the WBD Merger may require substantial commitments of time and resources by our management or the expenditure of significant funds in the form of fees and expenses, which could otherwise have been devoted to day-to-day operations or other opportunities that may have been beneficial to us; •the commitments we have obtained to finance the WBD Merger, including a senior secured bridge term loan facility, may require us to pay certain fees and expenses in connection with such commitments, and such fees and expenses could be substantial; •the ratings agencies could downgrade, or take other negative actions with respect to, our credit ratings or ratings outlook, which could adversely affect our ability to obtain cost-effective financing; •the price of our Class B Common Stock could decline significantly, including to the extent the current market price reflects an assumption that the WBD Merger will be consummated; -91- •we would not realize the benefits expected from the WBD Merger, which could place us at a disadvantage in competing with technology companies and others for content, creative talent and distribution; •we would continue to operate on a standalone basis, without the cost savings, synergies and other benefits expected from the WBD Merger, and as a result we may face greater challenges in executing our strategic and financial plans, and be required to implement additional cost-reduction measures, including further reductions in content and other spending, in order to achieve those plans; and •declines in our linear television revenues are expected to persist, and the growth of our streaming business on a standalone basis may be insufficient to offset them. See the risk factors included in our Annual Report on Form 10-K referred to above under “Risks Relating to Our Business and Industry.” In addition, if the WBD Merger is not consummated, we may experience negative reactions from the financial markets or from our employees, commercial partners, clients or customers. We could also be subject to litigation, including litigation related to failure to consummate the WBD Merger or to enforce our obligations under the WBD Merger Agreement. If the WBD Merger is not consummated, the risks described above may materially adversely affect our business, financial condition, results of operations or stock price. For a description of the circumstances under which the Regulatory Termination Fee is payable, see the WBD Merger Agreement. Paramount and WBD must obtain certain regulatory approvals in order to consummate the WBD Merger; if such approvals are not obtained or are obtained with conditions or if the WBD Merger is enjoined in connection with legal or regulatory proceedings, the WBD Merger may be prevented or delayed or the anticipated benefits of the WBD Merger could be reduced. The Closing is conditioned upon, among other things, the clearance or approval by various regulatory authorities in the United States and other jurisdictions and the absence of any orders enjoining the consummation of the WBD Merger. As a condition to granting the necessary approvals or clearances, regulatory authorities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on our business after consummation of the WBD Merger. If any such divestitures negatively impact our credit profile and credit ratings as compared to the combined business if we did not have to undertake such divestitures, we may not be able to obtain financing on as favorable terms as we otherwise anticipated, or at all. Any such requirements or restrictions sought by regulatory authorities could negatively affect our business, financial condition or results of operations following consummation of the WBD Merger. Any such requirements or restrictions may prevent or delay consummation of the WBD Merger or may reduce the anticipated benefits of the WBD Merger, which could also have a material adverse effect on our business, financial condition or results of operations. The WBD Merger is subject to a number of Closing conditions and, if these conditions are not satisfied, the WBD Merger Agreement may be terminated in accordance with its terms and the WBD Merger may not be consummated. In addition, the parties have the right to terminate the WBD Merger Agreement under certain circumstances, in which case the WBD Merger would not be consummated. The WBD Merger is subject to a number of Closing conditions and, if these conditions are not satisfied or waived (to the extent permitted by law), the WBD Merger may not be consummated. These conditions include: (i) the expiration of certain mandatory waiting periods or receipt of certain other clearances or affirmative approvals of certain governmental bodies, agencies or authorities and (ii) the absence of any law or order, issued by a court or governmental entity of competent jurisdiction, restraining, enjoining, prohibiting or preventing the consummation of the WBD Merger. Each of WBD’s and Paramount’s obligations to consummate the WBD Merger is also subject to certain other conditions, including, among others, the compliance with pre-closing covenants by and the accuracy of the representations and warranties of WBD (on the part of Paramount), on the one hand, and Paramount and Merger Sub (as defined in the WBD Merger Agreement) (on the part of WBD), on the other hand (in each case, subject to certain qualifications). Paramount’s obligation to consummate the WBD Merger is also -92- subject to (x) the absence of certain changes that have had, or would reasonably be expected to have, a material adverse effect with respect to the Streaming and Studios segments of WBD and (y) WBD not having completed the separation of its Streaming and Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate such separation. These Closing conditions may not be fulfilled and, accordingly, the WBD Merger may not be consummated. Additionally, the WBD Merger Agreement may be terminated by either Paramount or WBD (i) by mutual written consent, (ii) if any governmental entity of competent jurisdiction issues, enacts, enforces or enters any order permanently enjoining or prohibiting the consummation of the WBD Merger, and such order becomes final and non-appealable, or (iii) subject to certain limitations, if the Effective Time (as defined in the WBD Merger Agreement) has not occurred on or before 11:59 p.m., Eastern time, on March 4, 2027 (the “End Date”), subject to one automatic extension to June 4, 2027 if on such date all of the closing conditions, except those related to regulatory approvals and governmental orders, have been satisfied or waived. In addition, (x) the WBD Merger Agreement may be terminated by Paramount due to certain breaches by WBD of its representations, warranties and covenants contained in the WBD Merger Agreement, subject to certain cure rights and (y) the WBD Merger Agreement may be terminated by WBD due to certain breaches by Paramount of its representations, warranties and covenants contained in the WBD Merger Agreement, subject to certain cure rights. Litigation relating to the WBD Merger could prevent or further delay the Closing and/or result in the payment of damages following the Closing. In connection with the WBD Merger, we and WBD are subject to litigation and related proceedings, including proceedings seeking to block or enjoin the WBD Merger or seeking monetary damages, and we may become subject to additional litigation, demand letters, claims, enforcement actions or other proceedings relating to the WBD Merger. See Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q under the caption “Legal Matters—Litigation Relating to the WBD Merger,” and Part II, Item 1, “Legal Proceedings,” for additional information regarding certain pending WBD Merger litigation and related proceedings. The outcome of litigation and other proceedings is uncertain, and these matters, and any additional litigation, demand letters, claims, enforcement actions or other proceedings relating to the WBD Merger, could prevent or delay the Closing, result in substantial costs to WBD and Paramount, result in the payment of damages following the Closing, or otherwise adversely affect our business, financial condition or results of operations. In addition, governmental authorities have initiated, and could initiate additional, actions challenging the WBD Merger, which could further delay or prevent the Closing, result in burdensome conditions, terms, obligations or restrictions, or otherwise adversely affect the post-close entity. The anticipated closing of the WBD Merger has been delayed as a result of the lawsuit described above, with the parties agreeing to postpone closing until the earlier of five days following the court’s ruling or June 1, 2027. Although we expect the WBD Merger will result in synergies and other benefits, those synergies and benefits may not be realized or may not be realized within the expected time frame. WBD’s business may not be integrated successfully, or such integration may be more difficult, time-consuming or costly than expected. Operating costs, customer loss and business disruption, including difficulties in maintaining relationships with employees, customers, suppliers or vendors, may be greater than expected following the WBD Merger. Revenues following the WBD Merger may be lower than expected. Our ability to realize the anticipated benefits of the WBD Merger will depend, to a large extent, on our ability to integrate WBD’s business in a manner that facilitates growth opportunities or achieves the potential synergies, cost savings or revenue growth opportunities identified by Paramount without adversely affecting current revenues or investments in future growth. If we were required to divest certain businesses or assets, it may reduce our ability to -93- fully recognize such synergies. Even if we are able to integrate WBD successfully, the anticipated benefits of the WBD Merger, including the expected synergies, may not be realized fully or at all or may take longer to realize than expected. The acquisition of another public company and integration of its business with our business is complex, costly and time-consuming and may divert significant management attention or resources towards integration planning at the expense of Paramount’s and WBD’s ordinary course business practices and operations. Paramount and WBD have been operated as standalone businesses, and they will continue to be operated as such until the consummation of the WBD Merger. Upon consummation of the WBD Merger, our management may face significant challenges in integrating the technologies, organizations, systems, procedures, policies and operations, as well as addressing the different business cultures at Paramount and WBD, managing the increased scale and scope of the combined businesses, identifying and eliminating duplicative programs, and retaining key personnel. The post-closing integration process could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties. The overall combination of Paramount’s and WBD’s businesses may also result in material unanticipated expenses, liabilities, competitive disadvantages, and loss of customer, creative talent and other business relationships. Failure to efficiently and effectively integrate the two businesses and to realize the anticipated benefits of the WBD Merger could adversely affect our business, financial condition or results of operations. We have entered into a stipulation agreeing that the WBD Merger will not close, and we will not take any steps to integrate the operations of Paramount with those of WBD, until the earlier of five days following the court’s ruling or June 1, 2027. The difficulties of combining the operations of Paramount and WBD include, among others: •the diversion of management attention to integration matters; •difficulties in integrating operations and systems, including administrative, human resources and information technology infrastructure, financial reporting and internal control systems and intellectual property and communications systems; •challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies; •difficulties in integrating employees and attracting and retaining key personnel, including talent; •challenges in retaining existing, and obtaining new customers, viewers, subscribers, suppliers, distributors, licensors, lessors, employees, business associates, advertisers, creative talent and others; •difficulties in achieving anticipated cost savings, synergies, accretion targets, business opportunities, financing plans and growth prospects from the combination; •difficulties in managing the expanded operations of a significantly larger and more complex combined company; •the costs of servicing the increased indebtedness and interest expense of the combined company resulting from the WBD Merger and the related financing transactions; •challenges in continuing to develop valuable and widely-accepted content and technologies; •contingent liabilities that are larger than expected; and -94- •potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the WBD Merger. Many of these factors are outside of the control of Paramount and WBD, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially and adversely impact our business, financial condition or results of operations. In addition, even if the operations of WBD’s business are integrated successfully with Paramount, the full benefits of the WBD Merger may not be realized, including, among others, the synergies, cost savings or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of WBD’s business and the financing of the transactions. All of these factors could cause dilution to the earnings per share of Paramount, decrease or delay the projected accretive effect of the WBD Merger, and negatively impact the price of our Class B Common Stock following the WBD Merger. As a result, no assurances can be provided that acquisition of WBD will result in the realization of the full benefits expected from the WBD Merger within the anticipated time frames or at all. We have incurred, and will continue to incur, substantial direct and indirect costs as a result of the WBD Merger. We have incurred, and will continue to incur, substantial expenses in connection with and as a result of completing the WBD Merger, including financial advisory, legal, accounting, consulting and other advisory fees and expenses, employee-benefit and related expenses, regulatory filings, financing fees and filing and printing fees. In addition, over a period of time following the Closing, we expect to incur substantial expenses in connection with integrating and coordinating WBD’s business, operations, policies and procedures. A portion of the transaction costs related to the WBD Merger will be incurred regardless of whether the WBD Merger is completed. While we have assumed that a certain level of transaction expenses will be incurred, factors beyond our control could affect the total amount or the timing of these expenses. Many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. These expenses may exceed the costs historically borne by us. These costs could adversely affect our business, financial condition or results of operations. We expect that these expenses will increase, the longer it takes to complete the WBD Merger. We are incurring substantial indebtedness in connection with the WBD Merger, and the degree to which we will be leveraged following the completion of the WBD Merger may materially and adversely affect our business, financial condition and results of operations. We are incurring substantial indebtedness in connection with the WBD Merger. As of June 30, 2026, as adjusted for the WBD Merger, including assuming (i) an estimated $17.7 billion of outstanding senior notes of WBD as of March 31, 2026, are assumed in connection with the WBD Merger, (ii) borrowing the full amount of the $49.0 billion 364-day senior secured bridge term loan facility (or any other permanent financing incurred to reduce or replace such facility), including to refinance the WBD Term Loans, (iii) the two term A loans each for $2.5 billion to be funded at Closing, with maturities of three and five years, respectively, (iv) that our existing revolving credit facility is paid down at Closing and (v) that the new $5.0 billion five-year senior secured revolving credit facility remains undrawn, we would have had approximately $86.3 billion of total debt (excluding debt issuance costs and capital lease obligations). Our ability to make payments on and to refinance our indebtedness, including the debt incurred pursuant to the WBD Merger, as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations or financings. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to service our debt and meet our business needs, such as funding working capital or the expansion of our operations. -95- If our cash flows and capital resources are insufficient to fund debt service obligations or we are not able to repay or refinance our debt as it becomes due, we may be forced to take certain actions, including reducing spending on content and programming, reducing future financing for working capital, capital expenditures and general corporate purposes, reducing or delaying investments, reducing, suspending or eliminating our dividend, disposing of material assets or operations, seeking additional debt or equity capital, restructuring or refinancing our indebtedness or dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness. The lenders or bondholders that hold our debt could also accelerate amounts due in the event that we default, which could potentially trigger a default or acceleration of the maturity of our other debt. The level and quality of the combined company’s earnings, operations, business and management, among other things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned to the combined company or any series of its debt by the ratings agencies may negatively impact the combined company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can be no assurance that the combined company will be able to obtain financing on acceptable terms or at all, or be able to generate sufficient cash flow to reduce leverage in the time frame expected or at all. In addition, there can be no assurance that the combined company will be able to maintain the current creditworthiness or prospective credit ratings of Paramount or WBD, particularly given recent negative ratings actions or credit watches taken in light of the WBD Merger, and any further actual or anticipated changes or downgrades in such credit ratings may have a negative impact on the liquidity, capital position or access to capital markets of the combined company. In addition, our leverage could put us at a competitive disadvantage compared to our competitors that are less leveraged. These competitors could have greater financial flexibility to pursue strategic acquisitions and secure additional financing for their operations. Our leverage could also impede our ability to withstand downturns in our industry or the economy in general. Despite our expected level of indebtedness, we may still incur substantially more indebtedness. This could exacerbate the risks associated with our substantial indebtedness. We may incur substantial additional indebtedness in the future. The terms of the agreements governing the indebtedness we will incur in connection with the WBD Merger may limit, but not prohibit, us from incurring additional indebtedness. If new indebtedness is added to our current debt levels, the related risks that we now face could increase. Any additional indebtedness could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions. In addition, the amount of cash required to pay interest on any additional indebtedness levels will increase the demand on our cash resources and reduce funds available for capital expenditures, share repurchases and dividends, and other activities and may create competitive disadvantages for us relative to other companies with lower debt levels. Our existing stockholders will have a reduced ownership and economic interest in Paramount after the WBD Merger. The PIPE Transaction and the issuance of the Warrants may cause dilution to the earnings per share of Paramount, which may negatively affect the market price of our Class B Common Stock. Following Closing, it is anticipated that the Equity Syndication Parties (excluding affiliates of the Ellison Parties and RedBird) will receive approximately 40% to 43% of the outstanding shares of our Class B Common Stock as a result of the PIPE Transaction (as defined in the WBD Merger Agreement). The shares of Class B Common Stock issued in the PIPE Transaction will represent, in the aggregate, 73% to 78% of the shares of our Class B Common Stock outstanding after giving effect to the PIPE Transaction and assuming no Ticking Consideration is payable. Consequently, our existing stockholders will have a reduced ownership and economic interest following the consummation of the WBD Merger and the PIPE Transaction. Additionally, the Subscription Agreement with the Ellison Parties would result in the issuance of additional shares of Class B Common Stock in the amount required to finance any such Ticking Consideration. Assuming payment of the maximum Ticking Consideration that would be payable through the extended End Date of June 4, 2027 pursuant to the WBD Merger Agreement, the shares of -96- Class B Common Stock issued in the PIPE Transaction will represent, in the aggregate, 74% to 79%, of the shares of our Class B Common Stock outstanding after giving effect to the PIPE Transaction. A change in the concentration of the ownership of our Class B Common Stock as a result of the WBD Merger may affect the public float and trading volume in our Class B Common Stock. Our Class B Common Stock may be less liquid as a result of a reduced public float than the shares of companies with broader public ownership, which could have the effect of increasing volatility and adversely affecting the trading price of our Class B Common Stock. The issuance of shares of our Class B Common Stock as part of the PIPE Transaction and the shares of Class B Common Stock issuable upon the exercise of the Warrants could have the effect of depressing the market price of our Class B Common Stock. Furthermore, if we raise additional equity capital following the Closing, including in order to achieve our deleveraging goals with respect to the substantial indebtedness we will incur in connection with the WBD Merger, any such equity financings would result in additional dilution to holders of our common stock. In addition, we could encounter other transaction-related costs or effects, such as the failure to realize all of the benefits anticipated in the WBD Merger, which could cause dilution to earnings per share or decrease or delay the expected accretive effect of the WBD Merger and cause a decrease in the market price of our Class B Common Stock. We may also be required to pay the $7.0 billion Regulatory Termination Fee pursuant to the terms of the WBD Merger Agreement, which is expected to be financed through the issuance of additional shares of Class B Common Stock pursuant to the terms of the Subscription Agreements. If this occurs, it would result in dilution to our existing stockholders even if the WBD Merger is not consummated.