California opposes Paramount request for $1.88 billion bond

On August 31, the State of California and 11 other states, alongside the Writers Guild of America, urged a federal court judge to reject Paramount Skydance's request for a US$1.88 billion bond to cover costs arising from the delay in the acquisition of Warner Bros Discovery. California argued that any damages Paramount faces are self-imposed, and the court should reject any attempt to transfer the burden to the public and a non-profit union.

The state emphasized that Paramount willingly agreed to pay Warner Bros shareholders a daily "ticking fee" for every day it takes to close the transaction, starting on October 1. Paramount also voluntarily agreed to postpone the merger until the antitrust case, filed by the states, is resolved, or June 1, 2027, whichever occurs first.

California Attorney General Rob Bonta argued that Paramount is attempting to pass its responsibility onto others, and the bond request should be denied. Paramount countered that it will have already paid Warner Bros shareholders US$1.3 billion by the time the trial on the states' legal challenge concludes in April, and that the bond requirement is intended to protect against the costs of a delayed trial and injunction if the case fails.

The Writers Guild of America has also sued to challenge the deal, which the studios claim is "meritless". Regulators representing at least 68 countries have either approved or declined to challenge the merger, with the lawsuit being the only obstacle to the deal's closure.