Paramount Skydance is demanding that California and other US states, suing to block its merger with Warner Bros., put up $1.9 billion to cover fees the company will incur if the deal is delayed, according to a lawsuit filed Monday.
The company is supposed to pay a $7 million daily fee if the $110 billion merger does not close by September 30. Paramount noted that the trial of the state's legal challenge is scheduled for March, and by the time it concludes and final legal briefs are submitted in April, it will have paid Warner Bros. shareholders an unrecoverable $1.3 billion in “ticking fees.”
The audacious bid is the latest step in a growing fight between the media giant and a group of liberal states, which says taking over the historic studio could hurt filmmakers and moviegoers.
Paramount, which is run by David Ellison, whose family is a close ally of US President Donald Trump, launched a $110 billion bid for control of a stable of assets that includes Warner Bros. Pictures, CNN and the HBO Max streaming service.
California and 11 states sued Paramount on July 13, arguing that the deal would create a media behemoth with ​the power to raise prices in film and television. The Writers Guild of America has also sued to challenge the deal.
In late July, Paramount agreed to pause its acquisition of Warner Bros until after a ruling on a challenge by states to the deal.
Now, Paramount is saying the Clayton Antitrust Act and other federal law that calls on the plaintiffs — or states in this case — being required “to post a bond covering the potential harm from halting a transaction to litigate.”
“Here, every month of delay carries substantial and quantifiable financial consequences,” Paramount said in its statement.
As per the company, in addition to $1.7 billion in "ticking fees" through June 1, Paramount would incur $190 million in incremental financing costs by delaying the merger until June 2027. Paramount offered the fees as part of its pursuit of Warner Bros.
California Attorney General Rob Bonta said Paramount and Warner Bros "are two sophisticated companies who willfully decided to include a costly ticking fee as a provision in their merger contract."
Bonta added that Paramount itself agreed earlier to the timing it is now protesting. "Now, they’re trying to get a do-over," Bonta said. "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."
Similar merger challenges have taken an average of eight months for a judge to rule, a Reuters review of recent cases found.
The lawsuit, filed in Oakland federal court, threatens to derail Paramount CEO David ​Ellison's bid to transform his company into a major rival of Netflix and Disney.
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br>
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She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br>
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