Paramount increases the claim against the 12 US states: bail set at 1.88 billion

Paramount Skydance is stepping up the pressure once again on California and the other eleven states attempting to block the acquisition of Warner Bros Discovery. Having secured approvals in 68 jurisdictions, David Ellison is now taking the matter to court: he is demanding that the twelve states post a bond of $1.88 billion to cover the costs of the delay should their antitrust case fail.

Paramount’s argument is built on a contrast: nearly seventy competition authorities worldwide have examined the transaction without blocking it, whilst in the United States the case brought by California and the other eleven attorneys general remains pending. “We are grateful that competition authorities in nearly 70 jurisdictions around the world have independently and thoroughly reviewed this transaction, reaching the same conclusion: it is beneficial for competition, consumers and workers,” said Paramount Skydance’s CEO, David Ellison, said in a statement issued a few days ago.

After all, the US legal dispute comes at a price. From 1 October, the ticking fee provided for in the contract will come into effect: approximately 7 million dollars a day payable to Warner shareholders. Paramount estimates that, with the trial scheduled for March and closing submissions in April, the bill could reach 1.3 billion; by 1 June, the surcharges could rise to 1.7 billion, to which would be added 190 million in additional financing costs. Hence the request for a bond of 1.88 billion, intended to cover losses should the judge ultimately give the green light to the merger.

The move has annoyed California’s Attorney General, Rob Bonta, who claims that Paramount and Warner were well aware that they had included a costly clause in the contract and now wish to pass the consequences on to the states. But it is precisely this escalation that makes Ellison’s message all the clearer: don’t push your luck. The deal remains funded, but every extra month makes it more expensive and less inevitable.

“Whilst we remain confident that the law and the facts are on our side, we have offered commitments and concessions and remain open to working constructively with the Attorneys General of the various states to find a solution in the interests of our employees and the creative community in California and around the world,” said Ellison in the same press release issued a few days ago, which highlighted the green light from 68 countries around the world. Among the options on the negotiating table is also a possible sale of CNN, cited as a way of resolving the dispute with California.