Paramount Demands $1.88 Billion Bond from States Suing to Block Warner Bros. Merger

Paramount Skydance on Monday asked a federal judge to order a dozen states suing to block its planned $110 billion acquisition of Warner Bros. Discovery to post a $1.88 billion bond to cover the escalating costs of delay, according to a court filing in the antitrust case.

The request targets California and 11 other states that sued on July 13 to block the merger on antitrust grounds. The deal would combine Paramount and Warner Bros. studios, along with streaming platforms HBO Max and Paramount+ and a range of pay-TV networks. A federal judge set a trial for March 2, 2027, and the states’ challenge has halted the merger.

**Ticking Fees Mounting**

Paramount agreed under the merger terms to pay Warner Bros. Discovery shareholders a “ticking fee” of about $7 million per day — or 25 cents per share per quarter — beginning Sept. 30 if the deal does not close by then. By the time the 12-day trial concludes and final legal briefs are submitted in April, Paramount said it will have paid an “unrecoverable” $1.3 billion in ticking fees alone.

“Absent security, even a complete victory on the merits would not restore a dollar of those extraordinary losses,” Paramount said in the filing, which was reviewed by multiple outlets. The company cited federal law requiring plaintiffs who seek to halt a transaction to post a bond covering the potential harm from delay.

In addition to the $1.3 billion in ticking fees through trial, according to the New York Post, Paramount would face $1.7 billion in such fees through June 1 and $190 million in incremental financing costs if the merger is delayed until June 2027. The New York Post also reported that Paramount noted the Justice Department’s approval of the deal expires on Feb. 19, and that regulatory entities from at least 68 countries have already approved or declined to challenge the merger.

Paramount has said it received antitrust clearance from the U.S. Department of Justice and all other needed global jurisdictions. Last month, Paramount agreed to delay closing the acquisition to as late as June 2027 while the states’ case proceeds.

**States Push Back**

California Attorney General Rob Bonta’s office sharply rejected the bond request. In a statement reported by the Fresno Bee and other outlets, a spokesperson said: “Paramount went into this process with eyes wide open. They are lying in a bed of their own making.”

The statement added, “What’s more, Paramount itself stipulated to the timing it is now protesting — they agreed to the dates and did not request a bond as a condition of agreeing not to close until after the trial, and potentially as late as June 2027. Now, they’re trying to get a do-over.”

The office also said Paramount is “trying to blackmail us to get us to back down.”

The coalition of states includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, according to CNBC. The Writers Guild of America has also filed a lawsuit challenging the deal.

**Legal Precedent Uncertain**

The bond request faces an uphill battle, according to Business Insider. Corey Martin, an M&A lawyer and head of entertainment finance at Granderson Des Rochers, told the outlet it was “very unlikely” the judge would require the states to cover ticking fees. He cited the Nexstar-Tegna antitrust case, where the judge required only a $10,000 bond despite Nexstar asking for $150 million.

The judge, U.S. District Judge Araceli Martínez-Olguín, has discretion over whether to require a bond and in what amount.

**Political and Financial Stakes**

Governor Gavin Newsom has reportedly urged the sides to reach an out-of-court settlement, the Fresno Bee reported. Last week, Bonta and Paramount Chief Legal Officer Makan Delrahim separately addressed the litigation at a political conference in Sacramento, where Bonta said he was confident the states would prevail and that Paramount was “eager” to settle.

The bond request covers what Paramount called a “straightforward calculation” of maximum ticking consideration and financing costs from the litigation. But the company also cited broader harm: no integration, no ramped-up investment in content, production and creative talent, and uncertainty for employees of both companies.

The trial is scheduled for March 2, 2027, in Oakland federal court.