Paramount Skydance is escalating its financial warning in the antitrust fight over its proposed $111 billion merger with Warner Bros Discovery, telling a federal court that the Writers Guild of America and a coalition led by California Attorney General Rob Bonta should be required to post a bond approaching $2 billion if they want the deal kept on ice while litigation continues.
In a Tuesday reply brief, the David Ellison-run company argued that it faces $1.88 billion in potential damages tied to the court order delaying the transaction, citing both a ticking fee owed to Warner Bros Discovery shareholders and incremental financing costs. Paramount is seeking a bond as the case heads toward a March 2027 trial.
The timing is central to Paramount’s argument. According to the filing, a ticking fee of $7 million per day — more than $635 million per quarter — is set to begin October 1. Paramount told the court that, absent the stipulated injunction, it would close the transaction by September 30, 2026.
“Ticking fees like the one Paramount faces are extraordinarily rare, in part because they are extraordinarily expensive,” Paramount’s attorneys wrote in the brief. “It would be incredibly risky to add such fees solely to deter private litigation; if the merging parties ultimately lose the antitrust litigation, the payor of the ticking fee would be left with an enormous bill and no merger.”
Paramount said the fee was added not as a litigation tactic, but during “a highly competitive bidding war with Netflix,” and said it entered the transaction “confident that its transaction is legal under established U.S. and foreign antitrust laws and would clear the relevant regulatory hurdles well before those fees started accruing.” The company also pointed to approvals in more than 60 jurisdictions, while the source material notes that the vast majority of those approvals were limited to the immediate territory of the specific nations involved.
The Bond Fight
The bond dispute follows Paramount’s August 17 motion seeking financial protection while the case remains pending. Paramount had previously come up short in its effort to secure a faster trial in the challenge brought by the Rob Bonta-led coalition of state attorneys general and the WGA.
“Now that trial is scheduled for March 2027, roughly four months after the trial date proposed by Defendants, and more than half a year from now, Paramount seeks the bond to which it is statutorily entitled,” Paramount wrote in its earlier motion.
In Tuesday’s filing, Paramount sharpened that position, arguing that its evidence of financial harm has not been rebutted. “Paramount provided unrebutted evidence that, but for the Order, it may suffer $1.88 billion in damages,” the filing states. Paramount said the states did not dispute the alleged financial injury from the ticking fee and financing costs, and did not deny Paramount’s contention that it would close the transaction by September 30 but for the stipulated injunction.
“Because Paramount has established $1.88 billion in damages it will potentially suffer as a direct result of being wrongfully enjoined, the Court should grant the motion,” the company told the court.
Paramount also issued a separate statement Tuesday, saying that “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.” The company added: “Paramount agreed to delay closing to facilitate a prompt resolution of the case, while expressly preserving its legal rights and we continue to honor that agreement. We are not asking the district court to lift the no-close order, but to require enforcement of the bond that protects our financial interests while the litigation remains pending.”
Bonta, WGA Push Back
Bonta’s office responded briefly to Paramount’s latest filing. “We believe Paramount’s motion has no merit and look forward to presenting our case in court at the September 24th hearing,” the state DOJ said.
The WGA and the 12 attorneys general had already rejected Paramount’s position in a September 1 response. “Whatever regret Paramount may feel for its commitments to Warner Bros., to Plaintiff States, to the WGA, and to the Court, it cannot show that the Court acted ‘improvidently’ in signing the joint stipulation,” they wrote. “Nor can Paramount show why the public or a non-profit labor union should underwrite its acquisition of Warner Bros.”
As an alternative, they told the court that if Paramount’s motion is granted, the bond should be set at a nominal $10,000.
U.S. District Judge Araceli Martinez-Olguin has scheduled a September 24 hearing on the bond issue. The broader antitrust trial is set for March 2027.
A Merger Under Pressure
The underlying lawsuit was filed July 13 by the attorneys general and the WGA. Two weeks later, Paramount and Warner Bros agreed not to complete the merger until June 1, 2027, or until the legal challenges end, whichever comes first.
Bonta has been seeking structural remedies in order to back off the challenge. The source material notes that Ellison’s promise to put out more movies has been criticized by Bonta as an “old stale promise,” and that whatever proposals may have been discussed behind closed doors have not yet included peeling off CNN.
Settlement efforts remain unsettled. The source material states that no real settlement talks are currently underway, while October 1 has also been described as the date Paramount has supposedly given for talks to begin — or the point at which the company may start considering a corporate move from California to a red state. Bonta and allies have characterized relocation talk as “blackmail.” A previously anticipated settlement meeting was scuttled at the last minute by Bonta amid accusations that Paramount was leaking details of confidential discussions, an allegation Paramount denies.
The dispute is also drawing broader pressure. Iowa and Montana are moving to take the conflict to the Supreme Court. Meanwhile, figures and organizations including Tom Cruise, California’s current and next governor, the DGA, IATSE and Ari Emanuel have encouraged a settlement, according to the source material. On the other side, Block the Merger activists have been joined by concerns raised in a report submitted to the L.A. Board of Supervisors warning of possible significant regional job losses if the merger proceeds. The Department of Economic Opportunity has also predicted the deal could cost L.A. County billions in wages and hundreds of millions in tax revenue.
For now, the next major marker is September 24, when the court is set to take up whether the merger challengers must post a bond — and, if so, whether that figure looks anything like the $1.88 billion Paramount says is needed to cover the cost of keeping the deal paused.