Paramount Insists AGs and WGA Pay Costs Related to Merger Delay in New Briefs: ‘Must Accept Financial Consequences’

Paramount Skydance has submitted new filings to a U.S. district court judge, demanding that the Writers Guild of America and the 12 state attorneys general who have sued to halt the acquisition of Warner Bros. Discovery bear the financial consequences if the merger does not proceed. The studio argues that if the lawsuits impede the transaction, the plaintiffs must accept the financial repercussions of their decision.

Paramount had previously agreed to delay the merger to allow for a prompt resolution of the legal dispute, while maintaining its right to do so. The company is not requesting the court to lift the no-close order but instead seeks enforcement of the bond that safeguards its financial interests during the ongoing litigation. Starting October 1, Paramount will pay a $7 million daily fee to Warner Bros. shareholders for each day the merger remains unfinished, as outlined in the terms of the $111 billion acquisition deal.

Paramount contends that the lawsuits filed by the AGs and the Writers Guild are the sole obstacle preventing the merger's completion and asserts that the federal rules of civil procedure and the Clayton Antitrust Act require plaintiffs to shoulder the financial harm they cause if their challenge fails. The studio is requesting a $1.88 billion bond from the plaintiffs to cover the costs of the daily fees if the merger is delayed until the AG lawsuit goes to trial, scheduled for March 2027.

Paramount's legal brief emphasizes that the AGs did not dispute the evidence or contest the financial injury Paramount would incur from the order, and that the AGs failed to address the financial impact of the ticking fees and incremental financing costs. The state attorneys general argue that the ticking fees are self-imposed penalties added by Paramount to discourage Warner Bros. from abandoning its agreement with Netflix, and that the costs should not be borne by California taxpayers or the non-profit union.

They maintain that no final determination on the legality of Paramount's merger proposal has been made by any court, and the studio must demonstrate a significant change before the bond request is granted. Paramount has energized public support for a settlement by garnering backing from industry leaders like AMC CEO Adam Aron and Hollywood figures such as Endeavor CEO Ari Emanuel.

The studio's CEO, David Ellison, has threatened to relocate the company's headquarters out of California if a settlement is not reached. A ruling on the bond request is anticipated on September 24.