Paramount Seeks $1.88 Billion Bond as Warner Bros. Discovery Deal Faces Delay

Paramount Skydance is seeking a $1.88 billion bond from a group of state attorneys general and the Writers Guild of America as legal challenges threaten to delay its planned acquisition of Warner Bros. Discovery beyond a deadline that could trigger payments to WBD shareholders.

Paramount filed its request Aug. 17, asking that the plaintiffs provide security against costs associated with so-called ticking fees if the transaction remains on hold through the states’ antitrust trial, which is scheduled to begin March 2, 2027, according to reporting provided by The Streamable.

The dispute adds another financial dimension to the legal battle surrounding Paramount’s effort to acquire Warner Bros. Discovery. Paramount’s final bid included a provision requiring payments to WBD shareholders if the transaction failed to close by Sept. 30, 2026, according to The Streamable. Lawsuits subsequently brought by 12 states and the WGA have complicated that timetable.

Paramount argues that parties seeking to prevent the transaction from closing should bear the financial consequences if their challenges ultimately prove unsuccessful.

“If plaintiffs insist that this transaction is paused during the pendency of their lawsuit, they must accept the financial consequences if their challenge ultimately fails,” a Paramount spokesperson said, according to The Streamable.

Related: States, Writers Guild Urge Judge to Reject Paramount’s $1.9 Billion Bond Demand

The spokesperson said Paramount had agreed to postpone closing to allow the litigation to proceed quickly while retaining its legal rights. The company isn’t seeking to have the court eliminate the restriction on closing the transaction, the spokesperson said, but wants enforcement of a bond intended to protect it from financial losses while the cases remain unresolved.

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Paramount also argues that plaintiffs can be required to account for substantial financial damage caused by an unsuccessful challenge, according to The Streamable. The states reject that position, saying Paramount is attempting to shift responsibility for obligations it accepted under the acquisition agreement.

The company remains responsible for those contractual commitments even if it didn’t anticipate the legal challenges when negotiating the transaction, the states contend, according to the publication.

U.S. District Judge Araceli Martínez-Olguín, who is overseeing both legal challenges, has scheduled a Sept. 24 hearing on Paramount’s bond request, according to The Streamable.

The coalition of 12 states, led by California Attorney General Rob Bonta, sued in July in an effort to block the transaction. The WGA subsequently filed its own challenge. Both cases allege the combination would violate antitrust law and could reduce employment opportunities in Hollywood, according to The Streamable.

Paramount has said the transaction has received clearance in more than 65 jurisdictions, including approval from the U.S. Department of Justice, according to the publication.

After the lawsuits were filed, Paramount agreed not to complete the transaction until June 2027 or until the litigation is resolved, according to The Streamable. That delay creates the prospect that the shareholder-payment provision will take effect before Paramount can close the acquisition.

The legal fight is also escalating tensions between Paramount and California officials. Paramount has threatened to relocate its corporate headquarters and film studio from California if the states don’t reach a settlement, The Streamable reported.

Source: The Streamable