Paramount Seeks $1.88 Billion Bond as State Challenge Delays Warner Bros. Discovery Merger

Paramount Skydance has escalated its legal battle with a coalition of state attorneys general seeking to block its proposed acquisition of Warner Bros. Discovery. In a new court filing, Paramount requested that the states post a $1.88 billion bond to cover potential costs arising from the delay.

The proposed $110 billion transaction would combine two major Hollywood studios, Paramount and Warner Bros., while bringing together a broad portfolio of U.S. television networks and streaming services including Paramount+ and HBO Max. A dozen state attorneys general, led by California Attorney General Rob Bonta, filed a lawsuit in July arguing that the combination would violate the Clayton Antitrust Act by reducing competition.

Paramount argues that federal law allows courts to require plaintiffs seeking to halt a transaction to provide financial security against potential losses. The company says every additional month before closing generates significant and measurable costs that could not be recovered even if Paramount ultimately wins the antitrust case.

A major source of those costs is the merger agreement’s “ticking fee.” Beginning Sept. 30, Paramount is required to provide WBD shareholders with an additional $0.25 per share for every quarter the transaction remains unfinished, potentially amounting to roughly $650 million per quarter.

Paramount estimates that it could have paid approximately $1.3 billion in ticking fees alone by the time the trial concludes and final legal briefs are submitted. The company also warned that prolonged delays could jeopardize regulatory approvals it has already spent months securing.

The company has already received clearance from the U.S. Department of Justice’s Antitrust Division and the other international jurisdictions required for the transaction. Paramount had originally planned to close the acquisition by the end of September but has agreed to postpone completion while the state lawsuit proceeds, potentially until June 2027.

California has pushed back strongly against Paramount’s demand. Bonta’s office argues that Paramount and WBD knowingly included the ticking-fee provision in their merger agreement despite understanding that a transaction of this scale would face regulatory scrutiny.

The state also argues that Paramount previously agreed to the litigation timeline without demanding a bond as a condition for delaying the closing. From California’s perspective, the financial consequences therefore stem partly from contractual decisions made voluntarily by the two companies.

Paramount says the requested $1.88 billion represents the maximum potential ticking consideration and financing costs associated with the litigation. It argues that the broader economic impact could be even larger because the delay prevents the companies from integrating operations and increasing investment in content, production and creative talent.

Beyond the direct financial costs, the prolonged process could create additional uncertainty for employees, shareholders and the businesses themselves. The legal fight therefore represents more than an antitrust hurdle: it is increasingly becoming a battle over who should bear the financial cost of delaying a major corporate transaction while regulators challenge it in court.