Hollywood’s biggest merger fight now has an anvil hanging over it. The anvil is a bond request, and Paramount Skydance says it should weigh $1.88 billion.
The U.S. Justice Department has told the federal court overseeing the dispute that states seeking to delay Paramount’s proposed acquisition of Warner Bros. Discovery should be required to post security that accounts for the financial harm Paramount says an injunction could cause if the challenge ultimately fails.
Paramount says the clock becomes expensive after Sept. 30, when the merger agreement triggers a $7 million-per-day fee. By the time the case is expected to reach a decision after a March trial, the company says the unrecoverable cost could exceed $1 billion.
In a cartoon, this is the point where somebody notices the rope above his head.
California and 11 other states are challenging the transaction on antitrust grounds. The Writers Guild of America is also opposing the deal. Their case argues that combining the companies could reduce competition in film and television markets, including competition for labor and content.
The Justice Department filing does not decide that antitrust fight. It addresses a narrower question: if the court keeps the deal frozen and Paramount later wins, how much financial protection should have been sitting underneath the injunction?
In a cartoon, this is the point where somebody notices the rope above his head. In federal court, everybody has noticed it already, and they are arguing over the price tag.
The trial is scheduled for March. Until then, the merger remains a business story, a labor story and now, increasingly, a very expensive exercise in waiting.
