Paramount Seeks States to Cover Costs of Delayed Warner Bros. Deal
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Paramount Seeks States to Cover Costs of Delayed Warner Bros. Deal
- Paramount is requesting a federal judge compel 12 states and the Writers Guild of America to post a bond of up to $1.9 billion to cover costs incurred by the delay of its $110 billion acquisition of Warner Bros. Discovery.
- The delay stems from an antitrust lawsuit filed in July by a coalition of states led by California Attorney General Rob Bonta, pushing the trial date to March 2027.
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Paramount Skydance is seeking to have a federal judge order a coalition of 12 states and the Writers Guild of America to cover the financial ramifications of delaying its $110 billion acquisition of Warner Bros. Discovery. The company has requested a bond of up to $1.9 billion to mitigate the costs associated with the postponement, which include “ticking fees” payable to Warner Bros. Discovery shareholders.
The acquisition, initially valued at $110.9 billion, was announced on February 27, 2026. However, a lawsuit filed in July by a group of states, spearheaded by California Attorney General Rob Bonta, aims to block the merger on antitrust grounds. The states argue that combining Paramount and Warner Bros. Discovery would reduce competition in film distribution, big-budget movie releases, and basic cable television. The Writers Guild of America has also joined the challenge.
A federal judge has set the antitrust trial to begin on March 2, 2027, rejecting Paramount’s request for an earlier date. This delay carries significant financial implications for Paramount. Starting October 1, Paramount is obligated to pay Warner Bros. Discovery shareholders approximately $7 million for each day the transaction remains open, amounting to roughly $650 million per quarter. Paramount estimates these “ticking fees” alone could reach $1.3 billion by the time the trial concludes. The company also faces a potential $7 billion breakup fee if the deal ultimately collapses due to regulatory issues, with a termination date of June 4, 2027.
Paramount has expressed confidence in the legality and pro-competitive nature of the deal, which has already received approval from the U.S. Justice Department and regulators in 68 other jurisdictions. The company has stated it is open to a settlement with the plaintiff states.