Paramount Skydance has filed new briefs urging a U.S. district court judge to order that the Writers Guild of America and the 12 state attorneys general filing lawsuits to block its acquisition of Warner Bros. Discovery pay costs related to the ticking fees the studio is set to pay starting in October if the merger isn’t closed.
“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. 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,” said a Paramount spokesperson.
Starting on Oct. 1, Paramount Skydance must pay a $7 million-per-day ticking fee to Warner Bros. shareholders for each day the merger is not closed as per the terms that the studios agreed to as part of the $110 billion acquisition deal reached earlier this year.
Paramount Skydance argues to Judge Araceli Martinez-Olguin that the lawsuits filed by the 12 state AGs, led by California AG Rob Bonta, and the WGA are the only remaining hurdle between the studio and completion of the merger, and argue that the federal rules of civil procedure and the Clayton Antitrust Act, upon which the AGs’ lawsuit is based, “require plaintiffs to accept responsibility for the substantial financial harm incurred if their challenge ultimately fails.”
“[A]t the eleventh hour, after dragging their investigations out for many months without providing feedback on any areas of competitive concern, and just days before final regulatory approvals from the European Commission were secured, plaintiff states filed suit seeking to stymie the transaction while immunizing themselves from economic accountability if Paramount prevails,” the legal brief from the studio reads.
Paramount seeks a $1.88 billion bond from the plaintiffs to cover the costs of the ticking fees should the merger be held up until the AG lawsuit goes to trial, which is scheduled to take place in March 2027. The studio argues that the AGs “never dispute that evidence or otherwise contest that Paramount will suffer financial injury as a result of the Order, both from the ticking fee and the incremental financing costs—a financial harm that the states outright ignore.”
In their own legal brief filed last week, Bonta and the AGs argued that the ticking fees Paramount would incur were self-imposed penalties that the studio added to encourage Warner Bros. to abandon its previous tentative agreement to be acquired by Netflix, and that the costs should not be covered by California taxpayers and non-profit union.
“Paramount now wishes to offload its responsibility. […] Paramount waited twenty-four days to ask this Court to rewrite the stipulation it had just signed. Paramount conducted no intervening discovery. Paramount seeks not to dissolve the stipulation, but to expand it to include new, onerous terms that were never agreed upon by Plaintiffs or ordered by the Court,” the group’s lawyers wrote. “No court in this case has made a final merits determination on the lawfulness of Paramount’s proposed merger. Paramount must demonstrate a significant change, and it cannot.”
Paramount Skydance has raised public pressure on Bonta to reach a settlement before the ticking fee kicks in, rallying support from movie theater executives like AMC CEO Adam Aron and top Hollywood names like Endeavor CEO Ari Emanuel. Paramount CEO David Ellison has also threatened to move the studio’s headquarters out of California if a settlement isn’t reached.
A ruling on the bond request is expected to be made on Sept. 24.
The post Paramount Insists AGs and WGA Pay Costs Related to Merger Delay in New Briefs: ‘Must Accept Financial Consequences’ appeared first on TheWrap.
