Paramount Skydance asked a federal judge on Monday to require California, 11 other states, and the Writers Guild of America to post a $1.88 billion bond that would cover the company’s financial losses from its blocked merger with Warner Bros. Discovery.
In the newly filed court motion, Paramount argued the plaintiffs should post the bond because it is incurring at least $1.3 billion in losses due to the trial, which won’t start until March 2027. The $1.88 billion bond will be paid to Paramount should it win the antitrust case.
“The challenged merger does not threaten harm to competition in any market,” Paramount’s counsel wrote. “But the court-approved order not to close, which operates as the equivalent of a preliminary injunction, inflicts substantial costs on Paramount, which is otherwise poised to consummate the merger.”
Paramount previously agreed to delay the merger until June 2027, so that the case can go to trial. The Hollywood studio initially wanted to close its $111 billion acquisition of Warner Bros. by Sept. 30 in order to avoid paying $7 million in “ticking fees” per day. By the time it goes to trial next year, Paramount will have accrued over $1 billion in ticking fees.
The defendant is allowed to request a bond under the Clayton Antitrust Act of 1914, which California Attorney General Rob Bonta is invoking to justify his antitrust lawsuit against the proposed merger. Thus, Paramount is taking advantage of the statutory bond requirement under the federal law.
“Paramount is seeking a bond based on the straightforward calculation of the maximum potential ticking consideration and financing costs from this litigation. But these are not the only costs of delay,” a Paramount spokesperson said.
“By virtue of what will be at least an eight-month delay in closing, there will be no integration and no ramped-up investment in content, production, and creative talent by the combined company,” the spokesperson added. “Of course, in addition, employees of both Paramount and WBD are also harmed by the uncertainties caused by the delay.”
The bond request is the latest turn of events in the legal saga regarding the Paramount-Warner Bros. merger.
Last week, Paramount CEO David Ellison reportedly threatened to take his business out of California as soon as Oct. 1 if Bonta does not agree to settlement talks soon. In response, Bonta accused the company of trying to “blackmail the state into letting an illegal deal” close.
In an MS NOW interview on Monday, the Democratic attorney general suggested he is open to settling the case ahead of trial as long as Paramount and Warner Bros. make concessions.
“Coming to the table in this case in good faith to sincerely discuss how to resolve this case has always been on the table and remains on the table,” he said. “But Paramount, Warner Bros. breaking the law and expecting us to let them get away with it, that is not on the table and never will be on the table. And that’s essentially what they’re asking for right now.”
Bonta has not publicly commented on Paramount’s bond request yet.
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A Paramount spokesperson said the company remains confident in its defense of the merger. The antitrust case is the only regulatory obstacle left for the merger. On Friday, Mexico joined over 60 other foreign countries to approve the deal, with the Department of Justice giving the merger its approval in June. Bonta filed his multistate lawsuit in July, followed by the WGA with its own complaint.
U.S. District Judge Araceli Martinez-Olguin, who was nominated to the federal bench by former President Joe Biden, will consider Paramount’s motion for the $1.88 billion bond at a court hearing scheduled for Sept. 21.