Paramount Asks Federal Judge To Require California and Other States To Pay $1.88 Billion Bond As Warner Bros. Discovery Is on Hold

Paramount is trying to force California and 11 other states to pay nearly $2 billion in fees that the studio may be forced to pay as a result of the states’ lawsuit that has temporarily blocked its merger with Warner Bros. Discovery. Last month, a federal judge temporarily blocked the $110 billion deal, over concerns that it violated anti-trust laws such as the Clayton Antitrust Act. The CEO of Paramount, David Ellison, wrote in an op-ed published in the New York Times that he believes the lawsuit is really about concerns regarding how he would manage CNN.With the deal on hold, Paramount could be on the hook for $1.88 billion as it agreed to a “ticking” fee of $7 million a day for every day the deal is delayed beyond September 30. Paramount agreed to delay the deal until June 1, 2027, or until the trial in the states’ lawsuit concludes. In a filing on Monday, Paramount said that by June 2027, it will have paid $1.88 billion in fees. Besides the fees, the studio raised concerns that regulatory approvals may expire before the end of the trial as it pointed out that the Justice Department’s approval expires in February.“Because Paramount can prove with certainty that it will suffer severe financial harm from the No-Close Order, this is a textbook case for requiring bond,” the studio’s attorneys write. Paramount argues that the federal laws on which California is basing its lawsuit require plaintiffs to post a bond to cover potential damages from an injunction blocking a merger. However, it is unclear whether any bond will be required as judges can exercise discretion. The federal district court judge overseeing the case, Araceli Martínez-Olguín, a Biden appointee, declined to require California to pay bond as she said the lawsuit had been brought to “enforce important public interests.”California’s attorney general, Rob Bonta, rejected the argument that plaintiffs should pay the fees.“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,” Mr. Bonta said in a post on X. The filing is the latest step Paramount has taken as the company tries to ramp up pressure on California to resolve the lawsuit. Last week, Paramount executives floated selling off CNN or creating an independent board to govern the network.Meanwhile, Mr. Ellison has discussed the idea of moving Paramount’s headquarters out of California, a plan the company’s board has approved as a contingency if both sides do not reach an agreement to resolve the litigation.Mr. Bonta has also called that idea “blackmail.”While the litigation drags on, there have been questions about whether the two sides could reach a settlement to let the deal go through. Mr. Bonta told Politico last week that Paramount is “eager” for a settlement. Paramount has also said that it believes the “better path” is to reach a settlement.

Paramount Asks Federal Judge To Require California and Other States To Pay $1.88 Billion Bond As Warner Bros. Discovery Is on Hold

Paramount Asks Federal Judge To Require California and Other States To Pay $1.88 Billion Bond As Warner Bros. Discovery Is on Hold

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