Paramount demands $1.88 billion bond from states, WGA over Warner Bros. merger

Paramount Skydance is asking a federal court to require 12 states and the Writers Guild of America to post a $1.88 billion bond to protect the company against potential financial losses if its proposed Warner Bros. Discovery merger remains blocked until next year.

The request comes as the states and the WGA continue legal efforts to stop the $110 billion transaction, arguing that the merger would raise serious antitrust concerns.

U.S. District Judge Araceli Martinez-Olguin is scheduled to hear Paramount’s bond request on September 24.

The judge previously paused the transaction and scheduled a trial for March 2, 2027, pushing the expected closing date well beyond Paramount’s original target of late September.

Under the merger agreement, Warner Bros. Discovery shareholders would be entitled to approximately $650 million for every quarter the transaction remains incomplete after October 1.

That works out to roughly $6.9 million per day, creating a substantial financial obligation for Paramount while the litigation continues.

Paramount says the proposed $1.88 billion bond would cover the maximum potential payments owed to investors, along with associated legal expenses.

The states have strongly opposed the request, arguing that any financial costs resulting from the delay are largely the consequence of commitments Paramount made when negotiating the transaction.

In an August 31 court filing, attorneys general led by California Attorney General Rob Bonta argued that Paramount should not shift responsibility for the daily payment obligation to the states or the WGA.

The states said Paramount voluntarily agreed to the so-called “ticking fee” payable to Warner Bros. Discovery shareholders beginning October 1.

They also argued that the court’s decision to pause the transaction was not an improper action that would justify making public authorities or a labor organization financially responsible for Paramount’s acquisition.

Paramount, however, maintains that parties challenging the transaction should bear the financial consequences if the court ultimately rejects their arguments.

The company has agreed to keep the merger on hold until the trial concludes while maintaining its legal rights concerning the financial impact of the delay.

Paramount said it is not seeking to overturn the court’s order preventing the deal from closing during the litigation.

Instead, the company wants the court to enforce financial protection against the losses it could suffer while the merger remains suspended.

The proposed acquisition followed an extended battle for Warner Bros. Discovery, with Netflix previously pursuing its own effort to acquire the entertainment company.

In July, California and 11 other states filed a federal lawsuit in Oakland seeking to block Paramount’s proposed takeover.

The states argue that combining the companies would create an exceptionally powerful media business with the ability to reduce competition, pressure workers’ wages and increase costs for consumers.

They have also raised concerns about potential effects on movie theaters and distributors of traditional cable television services.

New York, Minnesota, Arizona, Colorado, Massachusetts, New Jersey, Washington, New Mexico and Nevada are among the states participating in the legal challenge.

With the trial not scheduled until March 2027, the dispute over the proposed bond could become an important financial issue as Paramount and the plaintiffs continue their battle over the future of the merger.