Paramount repeats demand that states, WGA pay merger fees
Paramount repeats demand that states, WGA pay merger fees
The company has requested that the 12 states suing to prevent its merger with Paramount be required to pay fees it’s on the hook for if the deal doesn’t close soon.
When Paramount Skydance made its last play to steal Warner Bros. Discovery away from Netflix, one of the key provisions in its sweetened offer was a ticking fee that would pay WBD shareholders if Paramount was unable to close the deal by Sept. 30, 2026. That pledge did not foresee separate lawsuits by 12 state attorneys general and the WGA that have thrown off the merger’s schedule, and now that it appears all but certain that the deal will not close by the deadline, Paramount is repeating its demands that the states and union should be held financially responsible.
Key Details:
- Pay up: Paramount is reiterating its request for states and the WGA to put up a $1.88 billion bond.
- Not our fault: The states have replied that the ticking fee is Paramount’s responsibility, win or lose.
- Hearing to come: A judge has set a date of Sept. 24 to hear Paramount’s arguments.
On Aug. 17, Paramount filed its request for the WGA and the states to put up a $1.88 billion bond in order to pay ticking fees that would be incurred if the deal doesn’t close until after the trial in the states’ case, which is currently set for March 2, 2027. In its newest letter, Paramount reiterates its position that it has been approved to merge with Paramount in more than 65 territories around the world, including by the U.S. Department of Justice.
“If plaintiffs insist that this transaction is paused during the pendency of their lawsuit, they must accept the financial consequences if their challenge ultimately fails,” a Paramount spokesperson said. “Paramount agreed to delay closing to facilitate a prompt resolution of the case, while expressly preserving its legal rights and we continue to honor that agreement. We are not asking the district court to lift the no-close order, but to require enforcement of the bond that protects our financial interests while the litigation remains pending.”
The company says that legally, plaintiffs are required to accept responsibility for “substantial financial harm” incurred if their challenge ultimately fails. In their reply, the states say that Paramount is simply trying to “offload its responsibility,” and that the company is still on the hook for meeting contractual obligations even if it didn’t foresee these legitimate legal challenges.
Judge Araceli Martínez-Olguín is presiding over both lawsuits and has set a hearing date of Sept. 24 to hear arguments over Paramount’s bond request. The group of 12 states, led by California Attorney General Rob Bonta, first filed their lawsuit to stop the merger in July, and were quickly followed by the WGA. Both suits say the merger will violate antitrust laws and lead to fewer jobs in Hollywood.
Following the filing of the lawsuits, Paramount agreed to pause the merger until June 2027, or until the trials conclude. Paramount has threatened to pack up its corporate headquarters and movie studio and move out of California if the states don’t agree to some kind of settlement. Between the threat of major job and financial losses in California and the potential for the states and Writers Guild to be liable to pay nearly $2 billion, Paramount is clearly attempting to flex its financial muscle in order to get the deal across the finish line.
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