12 State AGs, WGA Urge Judge to Reject Paramount’s $1.88 Billion Bond Demand Over Warner Bros. Merger

A coalition of 12 state attorneys general and the Writers Guild of America is urging a federal judge to reject Paramount Skydance’s demand for a $1.88 billion bond as they seek to block its $110 billion acquisition of Warner Bros. Discovery on antitrust grounds.

In a filing Monday, the challengers argued that the bond would force taxpayers and nonprofit labor unions to shoulder costs Paramount voluntarily assumed when it negotiated the Warner Bros. Discovery deal.

Under its merger agreement with Warner Bros. Discovery, Paramount must begin making additional payments to Warner Bros. Discovery shareholders if the transaction does not close by September 30. The payments, known as ticking fees, begin October 1 at roughly $7 million a day.

Paramount estimates those fees could reach about $1.3 billion by the time a March 2027 trial concludes and post-trial briefs are submitted in April. If the merger remains unfinished through June 1, the company says the payments could total approximately $1.7 billion, along with another $190 million in financing costs.

Paramount wants U.S. District Judge Araceli Martínez-Olguín to require the states and the WGA to provide $1.88 billion in financial security against those potential losses.

The challengers argue the requested bond would make them responsible for costs Paramount accepted when it negotiated the merger and later agreed not to close the transaction while the antitrust litigation proceeds.

“Paramount now wishes to offload its responsibility,” California Attorney General Rob Bonta argued in the filing.

Paramount counters that the plaintiffs should not receive a “free pass” from losses caused by delaying the merger if their challenges ultimately fail.

The request is governed by Rule 65 of the Federal Rules of Civil Procedure. When a court restrains a party through a temporary restraining order or preliminary injunction, the judge can require the party seeking that relief to provide financial security for certain costs and damages if the restriction is later found to have been improper.

The rule gives judges discretion over the amount of security required, including whether a bond should be imposed at all.

Martínez-Olguín has already considered that question once. When she temporarily blocked the merger in July, she waived the security requirement for the states, citing their role in enforcing antitrust laws in the public interest.

Paramount is now asking her to revisit the issue after the parties agreed to bypass a preliminary injunction fight and proceed toward a trial on whether the merger violates federal antitrust law.

The companies have agreed not to close the transaction until five days after the court resolves the challenges or June 1, 2027, whichever comes first.

California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington sued in July to stop the merger under Section 7 of the Clayton Act.

The states allege the merger would violate Section 7 by substantially reducing competition in parts of the film and television industries, including by giving the combined company greater power to raise prices.

The Writers Guild of America West and Writers Guild of America East filed a separate challenge focused in part on competition for writers and other creative workers.

Paramount denies the transaction violates antitrust law and argues the combined company would be better positioned to compete with larger entertainment and technology companies. The Justice Department has cleared the deal, but state attorneys general retain authority to bring their own challenges under federal antitrust law.

Martínez-Olguín is scheduled to hear Paramount’s bond request on September 24, less than a week before the approximately $7 million daily ticking fee is set to begin October 1. The antitrust trial is scheduled for March 2, 2027.