Paramount Skydance Seeks Bail from States Opposing Warner Bros. Acquisition
On Monday, Paramount Skydance approached a federal judge, asking for a requirement that the 12 states contesting its acquisition of Warner Bros. Discovery post $1.88 billion in bail to offset the delays in finalizing the deal.
The company emphasized that the $110 billion merger must be completed by September 30, or it will face costs amounting to $7 million a day. They pointed out that a trial concerning the states’ legal objection is set for March, and by the time the final legal brief is submitted in April, Paramount will have already paid $1.3 billion to Warner Bros. shareholders in what they termed “ticking fees” that cannot be recovered.
Additionally, Paramount indicated that the Justice Department’s endorsement of the merger is set to expire on February 19. They are demanding bail to cover potential losses if the merger is ultimately approved by the courts, claiming that the states involved “have sufficient resources” to post even sizable bail amounts.
Besides the $1.7 billion ticking fee that comes due on June 1, the postponement of the merger until June 2027 will lead to extra financing costs of $190 million for Paramount. The company had previously offered a fee to pursue Warner Bros.
In late July, Paramount agreed to press pause on its acquisition of Warner Bros. while awaiting a ruling related to challenges made by various states.
On July 13, California and 11 other states filed a lawsuit, arguing that the merger would result in a media giant capable of significantly increasing prices for movies and television. Furthermore, the Writers Guild of America has also initiated a lawsuit to contest the deal.
A review conducted by Reuters of recent merger cases revealed that judges typically take around eight months to reach decisions on similar matters.
Meanwhile, this legal battle—filed in federal court in Oakland—poses a significant threat to Paramount CEO David Ellison’s ambition of positioning the company as a serious competitor to both Netflix and Disney.
Paramount also pointed out that regulators from at least 68 countries have thoroughly examined the merger and either given it the green light or opted not to contest it, leaving this lawsuit as the primary obstacle to finalizing the deal.
