Paramount seeks $1.9 billion bond from states contesting Warner Bros. Discovery merger

Paramount Pictures and Skydance have filed a request that the states pursuing a lawsuit to block their $111 billion acquisition of Warner Bros. Discovery post a bond of $1,884,726,092. The company says the demand is grounded in the Clayton Act and other federal statutes that require plaintiffs to secure a bond covering potential harm caused by halting a transaction.

"Both the Clayton Act, the federal antitrust law upon which these suits are based, and other federal law expressly provide that plaintiffs are required to post a bond covering the potential harm from halting a transaction to litigate, so that if they lose, the injured party has a source of recovery for the damage caused," the statement read.

Paramount argues that the bond amount reflects the maximum possible “ticking” consideration and financing costs that could accrue during an anticipated eight-month delay, as well as lost integration benefits, content investment, and employee uncertainty. The company notes that all global regulators, including the U.S. Department of Justice, have approved the merger, leaving the state lawsuit as the sole remaining obstacle.

"It bears emphasis that the pursuit of this lawsuit by the State Plaintiffs has created a substantial delay in closing although all regulators who have analyzed the deal have cleared it," the filing said.

California Attorney General Rob Bonta responded by characterizing the bond request as “blackmail” and accused Paramount of creating the situation through its own contractual provisions.

"Paramount and Warner Bros. are two sophisticated companies who willfully decided to include a costly ticking fee as a provision in their merger contract. They knew this merger would undergo regulatory review; they knew it was not a done deal; and they chose to include it anyway," Bonta said.

The dispute highlights a broader debate within the entertainment industry over whether the states and the companies should settle the case or proceed to trial, with the bond demand potentially placing a significant financial burden on taxpayers.