Paramount Skydance filed for a $1.88 billion bond from 12 US states challenging its $110 billion merger with Warner Bros Discovery on August 17 to cover financial losses caused by the merger delay [1, 2, 3].
The bond amount adds up to "ticking fees" of roughly $650 million per quarter after September 30, alongside incremental financing costs resulting from the postponed deal [1, 2, 3]. Paramount has agreed to pay $7 million per day—or about $650 million per quarter—in ticking fees to Warner Bros shareholders until the merger closes following the September deadline [1, 2, 3].
Paramount argues that federal law requires plaintiffs seeking preliminary relief, like injunctions that delay the merger, to post a bond ensuring coverage of losses if the deal is ultimately allowed. The company said, "Every month of delay carries substantial and quantifiable financial consequences," and added, "Absent security, even a complete victory on the merits would not restore a dollar of those extraordinary losses" [2, 3]. They remain confident the plaintiffs' case is without merit and said they will defend the transaction in court [3].
The legal challenge stems from a lawsuit filed on July 13 by California Attorney General Rob Bonta and 11 other states. They allege the merger would reduce competition in the film and TV markets [1, 2, 3]. Bonta responded by accusing Paramount of trying to pressure the states, stating, "Paramount went into this process with eyes wide open. They are lying in a bed of their own making, and once again, trying to blackmail us to get us to back down" [1].
Paramount agreed to pause the acquisition process in late July pending the court ruling on the lawsuit [1, 2]. A US District Judge declined to require the states to post a bond in July, citing the public interest of the lawsuit [3].
The merger has gained regulatory approval from at least 68 countries and jurisdictions, with the lawsuit from the states remaining the only major obstacle [1, 3]. The US Department of Justice approved the merger but its approval expires on February 19, 2027 [1, 3].
The trial for the states' legal challenge is scheduled to begin in March 2027, with final briefs expected by April [1, 3]. If the deal falls apart due to regulatory issues, Paramount would owe a $7 billion breakup fee to Warner Bros Discovery [2].
