Paramount’s Trying To Pull A Fast One With $1.88B Bond Request In Antitrust Trial, State AGs, WGA Declares

Twelve state attorneys general and the Writers Guild of America have requested a federal judge deny Paramount's demand for a $1.9 billion bond to cover potential ticking fees and financing costs related to the Warner Bros. Discovery merger. Paramount will begin paying a $0.25 per share ticking fee on October 1, amounting to $650 million per quarter or $7 million daily until the merger concludes.

By the time the trial begins in March, Paramount will owe over $1 billion in ticking fees. Should the merger not close due to regulatory issues, Paramount will pay Warner Bros. Discovery a $7 billion termination fee. The deadline to finalize the $110 billion deal is June 4, 2027. In a Monday filing, the states and WGA contend that Paramount is attempting to "offload its responsibility" by imposing these fees and voluntarily delaying the merger's closure until after the trial or June 1, 2027.

They also argue that no bond is necessary since Judge Araceli Martinez-Olguin granted a temporary restraining order, deeming their lawsuit aimed at upholding vital public interests. The group asserts that Paramount "cannot demonstrate any change in circumstances justifying a material modification in terms." The attorneys argue that granting Paramount's request would allow the company to "unfairly reneg on its commitments without the required showing" and encourage other merging entities to negotiate high fees to shield themselves from state and private antitrust enforcement.

The filing concludes by urging the court to deny Paramount's motion and decline to modify the stipulation requiring a bond, alternatively, suggesting a nominal $10,000 bond if the motion is granted. Paramount spokesperson countered that plaintiffs seeking to block a transaction must post a bond to "protect against the harm caused if their challenge ultimately fails" under the Clayton Act.

They contend that the states and WGA should not be exempt from this requirement simply because their interpretation of the public interest differs from regulators who have cleared the transaction. Paramount emphasized its confidence in the evidence supporting their lawsuit's merit and its commitment to closing the $110 billion deal, ultimately benefiting consumers and entertainment industry workers.