Key facts
- Paramount Skydance is requesting a $1.88 billion bond from plaintiffs challenging its Warner Bros. Discovery merger.
- The merger is paused due to lawsuits from 12 states and the Writers Guild of America, citing anticompetitive concerns.
- Paramount faces a $7 million daily 'ticking fee' if the deal does not close by September 30.
- Cinema United, a trade group for theater owners, has called for a settlement between Paramount and California AG Rob Bonta.
- The CEOs of AMC Theatres and Regal Cinemas have endorsed the proposed merger.
Paramount Skydance is urging a U.S. judge to require the dozen states and the Writers Guild of America challenging its proposed acquisition of Warner Bros. Discovery to post a $1.88 billion bond. The company argues this bond would cover costs incurred due to delays in completing the $110 billion merger, which is currently paused by these lawsuits.
Paramount faces a daily 'ticking fee' of $7 million if the merger does not close by September 30. The company estimates that by the conclusion of the trial, scheduled for March, and the submission of final legal briefs in April, it will have paid $1.3 billion in unrecoverable ticking fees. Additionally, Paramount noted that the U.S. Justice Department's approval of the deal expires on February 19, and it would incur $190 million in incremental financing costs if the merger is delayed until June 2027.
The states, led by California, sued on July 13, arguing the deal would create a media behemoth with the power to raise prices. A Reuters review of recent cases found that similar merger challenges typically take about eight months for a judge to rule. Paramount stated that regulatory entities from at least 68 countries have approved or declined to challenge the merger, and these lawsuits are the sole obstacle to its closure.
Cinema United, a trade organization representing theater owners, has appealed to California Attorney General Rob Bonta and Paramount Skydance to meet and discuss a settlement to the ongoing antitrust case. The group acknowledged the impact of studio consolidation on movie theaters and consumers but expressed openness to "tangible and enforceable guardrails" to protect the industry. The call for settlement follows endorsements of the merger from the chief executives of AMC Theatres and Regal Cinemas.