From The Hollywood Reporter · Winston Cho · · 1m 30s
Justice Department backs Paramount's $1.88 billion bond demand
The DOJ wants California and 11 other states to pay for delaying the Paramount and Warner Bros. Discovery deal if they lose.
In brief
The DOJ wants California and 11 other states to pay for delaying the Paramount and Warner Bros. Discovery deal if they lose. If the judge orders the bond, the states suing over the $111 billion merger could owe up to $1.88 billion if Paramount wins. Originally reported by The Hollywood Reporter.
Washington picks a side
On Tuesday the Justice Department asked a federal judge to make a dozen states, led by California, pay for the delay their lawsuits caused to the $111 billion Paramount and Warner Bros. Discovery merger.
A bond with real teeth
The DOJ says the states must post a proper bond that reflects the damages the delay could cause. Its view is that anyone who halts a deal should carry the risk.
“The bond requirement forces parties to have skin in the game.”
Paramount names its price
Last week Paramount kept pressing California Attorney General Rob Bonta for a $1.88 billion bond. It would cover Paramount's losses if it wins the cases over the paused deal.
Trial pushed to March
The deal is on hold, and trial isn't until March. That is months after CEO David Ellison's goal of closing by late September.
Every day costs millions
If the merger hasn't closed by Oct. 1, Warner shareholders are owed about $650 million a quarter, or $6.9 million a day. The bond equals that maximum payout plus legal fees.
States push back
The states and the WGA say Paramount offered that fee to win over shareholders who were weighing a rival bid from Netflix. Now, they argue, it wants someone else to pay it.
“now wishes to offload that responsibility”
What matters most
If the judge orders the bond, the states suing over the $111 billion merger could owe up to $1.88 billion if Paramount wins.
