paramount skydance will try to force pending states to merge with warner bros discovery A new filing in the antitrust case on Monday asks it to pay fees and costs related to the delay.
Paramount is seeking $1.88 billion in state-issued bail behind the lawsuit. In July, more than a dozen state attorneys general, led by California’s Rob Bonta, challenged the proposed $110 billion merger between Paramount and WBD.
The proposed deal would bring together two well-known film studios, Paramount and Warner Bros., and the vast portfolio of U.S. pay-TV networks and streaming platforms HBO Max and Paramount+.
In an initial filing, a group of state attorneys general said the merger would violate the Clayton Antitrust Act, a more than 100-year-old law that prohibits anticompetitive mergers and acquisitions.
In a statement from a Paramount spokesperson, the company noted that the Clayton Antitrust Act and other federal laws require the plaintiff (in this case, the state) to “post a bond to cover potential damages from a litigation suspension.”
Paramount said in a statement that “each month of delay has a significant and quantitative financial impact.”
In response, a representative from Bonta’s office said in a statement: “Paramount entered this process with their eyes wide open. They are lying in a bed of their own making.”
Paramount has also received regulatory approvals from the U.S. Department of Justice’s Antitrust Division, as well as all other necessary global jurisdictions to proceed with the merger. But last month, Paramount agreed to delay the proposed deal until up to June 2027 while the state’s lawsuit heads to court.
Paramount had long planned to complete the deal by the end of September. The delay could be costly for Paramount.
Paramount has agreed to a so-called ticking fee under the terms of the merger agreement, which will pay WBD shareholders an additional 25 cents per share every quarter from Sept. 30 until the deal closes. This amount could amount to up to approximately $650 million in cash value per quarter.
“By the time the trial concludes and the parties file their final briefs, Paramount will have paid Warner Bros. shareholders an unrecoverable $1.3 billion in ticking fees alone,” Paramount said in its filing. “Delays also threaten to invalidate regulatory approvals that the defendants have already spent months securing.”
“Without collateral, even a complete victory on the merits would not recover a single dollar of these extraordinary losses, which is why federal law requires plaintiffs to provide collateral as a condition to receiving preliminary relief, such as a court-approved order,” the filing states.
“Paramount and Warner Bros. are two sophisticated companies who intentionally decided to include a high ticking fee as a provision in their merger agreement,” Bonta’s office said in a statement. “Both companies knew that this merger would be subject to regulatory review, knew that this was not a done deal, and still chose to include it.”
“Furthermore, Paramount themselves dictated the timing of the current protest. They agreed to a date and did not require a bond as a condition of agreeing not to close until after the trial, no later than June 2027. Now they are trying to start over,” Bonta’s statement said.
In Paramount’s statement, the company said the $1.88 billion amount is “a simple calculation of the maximum potential ticking consideration and financing costs from this litigation.”
However, the statement added that these are not the only costs associated with contract delays. “With a closing delay of at least eight months, there will be no integration and no increased investment in content, production and creative talent by the combined company. In addition, of course, Paramount and WBD employees will also be harmed by the uncertainty created by the delay.”
States suing to block the merger include California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
