Paramount Pictures is currently engaged in a legal battle due to an antitrust lawsuit that has halted its planned acquisition of Warner Bros. Discovery. The company is attempting to mitigate financial risks associated with the delay in the transaction.
According to CNBC, on Monday, Paramount filed a motion in court requesting that 12 states and the Writers Guild of America (WGA) post a bond of $1.88 billion.
It’s worth noting that the coalition of 12 state attorneys general, led by California, filed the complaint against the proposed acquisition on July 13. The plaintiffs are seeking to suspend the deal until the court can review the case. They argue that allowing the completion of the merger would cause irreparable harm to competition, potentially creating a media giant capable of raising prices in the film and television industries.
This legal action is why Paramount has approached the court. The bond requested is intended to cover losses incurred during the antitrust litigation, and it would be refunded to Paramount if the company prevails in court.
Paramount has directed its request to federal judge Araceli Martinez-Olguin, asking for a modification of a previous order. Plaintiffs must deposit the required amount by September 30, 2026.
Rising Delay Costs for Paramount
A representative of Paramount has confirmed that they have filed a motion to enforce a statutory requirement.
The merger agreement includes a so-called ticking fee, which the company is obligated to pay Warner Bros. Discovery shareholders starting October 1. This fee amounts to approximately $7 million per day and will accrue until the deal is finalized. With the anticipated closing in March 2027, the total cost could exceed $1.2 billion.
Additionally, the company will pay around $650 million for each quarter of delay beyond October 1. If the transaction collapses due to regulatory issues, Paramount would owe Warner Bros. Discovery an additional $7 billion in termination fees.
Coalition of 12 States Blocks the Transaction
California Attorney General Rob Bonta leads the coalition of states that filed the lawsuit against the $111 billion transaction in July. Plaintiffs contend that the merger would stifle competition in the theatrical market, high-budget films, and basic cable television. The Writers Guild of America has initiated a separate proceeding, arguing that the merger would reduce the number of buyers for screenwriters’ work.
The court issued a temporary restraining order against the merger for 28 days in July. The judge initially waived the requirement for a bond, acknowledging that the states demonstrated they were suing to protect a significant public interest. Paramount has agreed to suspend the merger until the legal proceedings conclude, with the trial set to begin on March 2, 2027.
