Paramount demands $1.9B bond from attorneys general fighting Warner Bros. Discovery merger
Paramount is asking a federal judge to make the state attorneys general suing to block its proposed merger with Warner Bros. Discovery put up a $1.9 billion bond, escalating a legal battle that is heading to trial in March.
The company filed a motion Monday arguing that the bond is necessary because of the mounting costs it faces while regulators and courts hold up the deal. Paramount says the merger agreement signed last winter includes so-called ticking fees that will cost it roughly $7 million a day after September 30. By the time the antitrust trial ends, the company estimates it will have racked up $1.3 billion in unrecoverable financial losses.
“This is a textbook case for requiring bond,” Paramount said in the motion. The company argues that if the states, along with the Writers Guild of America, want to keep blocking a deal that Paramount says remains valid until June 2027, they should be prepared to pay if they ultimately lose.
The states are not buying it. California Attorney General Rob Bonta, whose office is part of the coalition of 12 state attorneys general challenging the deal, told CNN that the request was baseless. “They don’t have any legitimate claim. I mean, honestly, this reeks of desperation,” he said. A spokesperson for Bonta’s office hit back harder, saying: “Paramount went into this process with eyes wide open. They are lying in a bed of their own making, and once again, trying to blackmail us to get us to back down.”
Whether the judge overseeing the case, Araceli Martinez-Olguín, will go along remains to be seen. She has already signaled skepticism. Earlier in the litigation, Martinez-Olguín declined to require a bond after finding that the states had brought the lawsuit “to enforce important public interests.” The coalition also scored an early win when she issued a temporary restraining order last month. After that, both sides agreed to skip a preliminary injunction hearing and move straight toward trial, a schedule that made the ticking fees increasingly likely to accumulate.
The request is part of a broader pattern that antitrust experts say may be designed to pressure the states into settling. Some legal observers also see the bond motion as an effort to build a record for a fast-track appeal, potentially up to the Supreme Court. Paramount counters that the losses are real and that the plaintiffs should bear them. “Regardless of when the judicial process concludes, Paramount is certain to suffer serious financial loss,” the company said.
During an interview with CNN’s Jim Sciutto on “The Brief,” Bonta said Paramount knowingly agreed to the ticking-fee terms while regulators were still reviewing the deal. “Now they’re trying to put the California taxpayers on the hook,” he said. He added that he expects the judge to reject the bond request because “there’s no basis for it.”
Asked whether Paramount might be positioning the case for an eventual Supreme Court appeal, Bonta said he didn’t know. “I respectfully suggest that they focus on the antitrust case in front of them that we set forth in our complaint, because that’s all this is about.”
Paramount and its allies have repeatedly described the state lawsuit as politically motivated. The attorneys general say they are simply enforcing antitrust law in a media industry already under scrutiny for consolidation. “We’re confident with the law and the facts in our case,” Bonta said Monday.