Paramount seeks $1.88B bond from state AGs to cover WBD merger delay costs

Paramount Skydance will seek to force the states holding up its merger with Warner Bros. Discovery to pay for the fees and costs associated with the delay, according to a new filing in the antitrust case Monday.

Paramount is requesting a $1.88 billion bond that would be paid by the states behind the lawsuit. In July, a dozen state attorneys general led by California’s Rob Bonta filed to challenge the proposed $110 billion merger between Paramount and WBD.

The proposed deal would combine two storied film studios — Paramount and Warner Bros. — as well as put together a sprawling portfolio of pay TV networks in the U.S. and streaming platforms HBO Max and Paramount+.

Paramount has received regulatory approvals from the Antitrust Division of the U.S. Department of Justice, as well as all other global jurisdictions needed to move forward with the merger. But last month, Paramount agreed to delay the proposed acquisition to as late as June 2027 while the state AGs’ case heads to trial.

Paramount long planned to have the deal closed by the end of September. The delay could prove costly for Paramount.

Paramount agreed to a so-called ticking fee under the terms of the merger agreement, meaning that beginning Sept. 30 it would pay WBD shareholders an additional 25 cents per share, per quarter, until the deal closes. The amount could add up to roughly $650 million in cash value per quarter.

“By the time trial concludes and the parties submit their final briefs, Paramount will have paid Warner Bros. shareholders an unrecoverable $1.3 billion in ticking fees alone,” Paramount said in the filing. “Delay also threatens to nullify the regulatory approvals that Defendants have already spent months securing.”

“Absent security, even a complete victory on the merits would not restore a dollar of those extraordinary losses. That is precisely why federal law requires plaintiffs to provide security as a condition for receiving preliminary relief such as the court-approved order,” the filing says.

If the deal were to fall apart due to regulatory concerns Paramount would owe WBD a $7 billion breakup fee.

This story is developing. Please check back for updates.