Paramount Asks States to Shoulder Costs of Delaying Warner Bros. Deal

Paramount on Monday asked a federal judge to force the opponents of its acquisition of Warner Bros. Discovery to cover the costs of the delay created by their lawsuit seeking to block the deal.

Paramount is seeking a $1.88 billion bond from 12 states, led by California, along with the Writers Guild of America, which have sued to stop the company’s deal to acquire Warner Bros, citing antitrust concerns.

Earlier this year, the judge in the case temporarily halted the merger and later scheduled a trial for March, a delay that could put Paramount on the hook to pay Warner Bros. shareholders hundreds of millions of dollars.

As part of the terms of its deal with Warner Bros., Paramount must pay $650 million every quarter if the transaction has not closed by Oct. 1.

Paramount’s merger with Warner Bros. would create a Hollywood powerhouse combining two major movie studios, multiple streaming services and the news networks CNN and CBS News under the same roof.

Twelve state attorneys general sued last month to block the deal, arguing that the company would have outsize market power.

Paramount has argued it would create necessary scale to compete against large technology companies like Netflix that have moved into the traditional media industry.

On Monday, Paramount said it wanted the states to post a bond that would cover the fees it would owe to Warner Bros. Paramount would collect the proceeds from the bond if the states lost their case.

“Every month of delay carries substantial and quantifiable financial consequences,” Paramount said in a statement, which was addressed to Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California, who is presiding over the case.

“By virtue of what will be at least an eight-month delay in closing, there will be no integration and no ramped-up investment in content, production and creative talent by the combined company,” the statement said, adding that employees of both companies are harmed by the uncertainties caused by the delay.

Seamus Hughes contributed research.