California and Writers Guild fight Paramount’s $1.88 billion bond demand in WBD case

California Attorney General Rob Bonta, joined by 11 other states and the Writers Guild of America, filed papers in federal court in Oakland on August 31 urging the judge to reject Paramount Skydance’s motion for a $1.88 billion bond. Paramount wants the plaintiffs challenging its $110 billion purchase of Warner Bros. Discovery to guarantee the money it says it will lose while the antitrust case keeps the deal from closing.

The dispute turns on a so-called ticking fee. Under the merger agreement, Paramount owes WBD shareholders $7 million for every day the transaction remains open after September 30. Paramount has told the court that by the time the case is argued in the spring it will have handed over roughly $1.3 billion it can never recover, and that the bill could reach $1.7 billion in fees plus about $190 million in financing costs if the deal slips to June 2027.

The states’ answer is that Paramount built this problem itself. According to the Reuters report on the filing, Bonta argued that the company offered the daily payment to lure WBD away from a rival Netflix bid and then voluntarily promised not to close until the state lawsuit ends or June 1, 2027, whichever comes first. In his words, any damages are self-imposed, and taxpayers should not be asked to underwrite them.

Why it matters

Bond requests of this size are rare in merger litigation. Paramount’s position is that plaintiffs who block a transaction should carry the downside if their case fails, and that the states cannot stop the closing while avoiding responsibility for the delay. If the judge sides with Paramount, state attorneys general could face a new financial deterrent before challenging large media deals; if the motion is denied, the ticking fee becomes purely Paramount’s burden.

The timing is also awkward for the buyer. Press.pl notes that the merger has already been cleared by 68 regulators, including the European Commission, and that the antitrust trial is scheduled to open on March 2, 2027. The WGA, which has filed its own suit, told the court it fears a combined studio with too much pricing power in film and television.

What’s next

A ruling on the bond is expected before the ticking fee starts running at the end of September. Final briefs in the underlying case are due in April 2027, so even a quick decision on the bond will not change the basic calendar: Paramount and WBD will spend at least the next seven months, and potentially the next nine, paying for a deal they cannot yet complete.