Paramount Seeks $1.9 Billion Bond From States in Merger Lawsuit

Paramount Skydance Corp. requested a $1.88 billion bond from the 12 states that have filed an antitrust lawsuit over the media giant’s pending merger with Warner Bros. Discovery Inc.

The company said Monday that federal law requires plaintiffs 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.” Paramount said it calculated the bond amount based on maximum potential ticking fees required under the deal if it doesn’t close before Oct. 1, and the financing costs from litigation.

“Here, every month of delay carries substantial and quantifiable financial consequences,” the company said in a statement.

The judge overseeing the case, Araceli Martínez-Olguín, previously declined to order a bond in July, saying the states have demonstrated they “bring suit to enforce important public interests.”

A trial date has been set for March. If the merger is finalized after Sept. 30, Paramount will have to pay a ticking fee of about $650 million per quarter to Warner Bros. shareholders until the deal closes.

As of last week, Paramount has won regulatory clearance from 68 jurisdictions around the world for its $110 billion acquisition of Warner Bros. Though the US Justice Department has green lit the deal, a group of states led by California Attorney General Rob Bonta has argued that the merger would hurt film and television distribution and result in fewer jobs in the entertainment industry.

Photo: Photographer: Ethan Swope/Bloomberg