Wave Wire Services
LOS ANGELES — Paramount Skydance Corporation asked a federal judge Sept. 8 to require state attorneys general and the Writers Guild of America to post a bond to cover potential losses stemming from lawsuits that have delayed the company’s proposed $110 billion acquisition of Warner Bros. Discovery.
Paramount filed reply briefs in support of its request, saying it has satisfied all conditions needed to close the transaction and received regulatory clearances in 69 jurisdictions.
The company said the lawsuits filed by a group of state attorneys general and the WGA are the only remaining obstacles to completing the merger.
“If plaintiffs insist that this transaction is paused during the pendency of their lawsuit, they must accept the financial consequences if their challenge ultimately fails,” a Paramount spokesperson said.
“Paramount agreed to delay closing to facilitate a prompt resolution of the case, while expressly preserving its legal rights and we continue to honor that agreement. We are not asking the district court to lift the no-close order, but to require enforcement of the bond that protects our financial interests while the litigation remains pending.”
The California Attorney General’s Office rejected Paramount’s argument.
“We believe Paramount’s motion has no merit and look forward to presenting our case in court at the September 24th hearing,” the Attorney General’s Office said in a statement.
The Writers Guild of America did not respond to a request for comment.
Paramount contends the delay could result in as much as $1.88 billion in losses from financing and other costs if the company ultimately prevails in the litigation.
The company cited the federal Clayton Act and Rule 65 of the Federal Rules of Civil Procedure in arguing that plaintiffs seeking to prevent the transaction from closing should be required to post a bond covering potential losses.
“But for these lawsuits, the transaction is now otherwise ready to close, and the resulting costs of delay are substantial and quantifiable,” the Paramount spokesperson said.
Under an agreement reached in the case, Paramount and Warner Bros. cannot complete the transaction until June 1, 2027, or until after a court decision on the states’ claims, whichever occurs first.
California Attorney General Rob Bonta and 11 other state attorneys general filed a federal antitrust lawsuit in July seeking to block the merger, alleging the combination would reduce competition and result in higher prices, lower content quality and fewer movies and television shows.
The Writers Guild of America has also challenged the transaction, arguing the merger would harm competition and lead to entertainment-industry job losses.
The U.S. Department of Justice completed its review of the proposed transaction June 12 without seeking to block it.
Paramount CEO David Ellison has defended the merger, saying in an Aug. 14 statement that it “will create a stronger competitor with greater capacity to invest in premium content, support creative talent and workers, and deliver more high-quality entertainment to audiences.”
The litigation has also prompted calls from some Southern California elected officials for the parties to reach a settlement.
County Supervisor Kathryn Barger said Aug. 28 that prolonged uncertainty surrounding the merger could further harm the Los Angeles County film and television industry and urged Bonta and Paramount to resume settlement talks.
Bonta previously said he was willing to negotiate but canceled a planned meeting with Paramount representatives after details of confidential settlement discussions were leaked to the media. Paramount denied being the source of the leaks.
Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra, the Democratic candidate for governor, have also called for the parties to negotiate a resolution.
City Councilwoman Nithya Raman, who is challenging Bass in the Nov. 3 mayoral election, has opposed a settlement that would allow the merger to proceed under its current terms.
