The United States Department of Justice has intervened in federal court to request that a coalition of states seeking to block Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery be required to post a financial bond. In a filing submitted to a California federal court, the federal regulator argued that states and private plaintiffs pursuing a preliminary injunction under federal antitrust law must provide a bond to cover potential damages and delays should the blocking order later be overturned.(Reuters)
The intervention addresses a legal challenge mounted by twelve states, led by California, alongside the Writers Guild of America. Opponents of the mega-merger contend that combining the two entertainment giants would create a dominant media conglomerate capable of inflating prices across the film and television industries. However, the requirement to post a bond introduces substantial financial exposure for the plaintiffs seeking to halt the transaction prior to a full trial.
The Justice Department’s stance aligns with motion efforts by Paramount Skydance, which previously petitioned the court to require the state coalition to post a $1.88 billion bond. Under the terms of the merger agreement, Paramount faces severe financial penalties if the transaction fails to finalize by its end-of-month target, incurring a daily fee of $7 million for every day the deal remains uncompleted after September 30. Paramount highlighted that with the trial scheduled for March and final briefs expected by April, the company will have accumulated approximately $1.3 billion in unrecoverable ticking fees paid directly to Warner Bros. Discovery shareholders while the judicial review plays out.
