PSKY Stock Rallies For 12 Straight Sessions — Paramount Demands $1.88B Bond From State Prosecutors Over Delayed Warner Merger

• Paramount wants 12 state attorneys general to post a $1.88-billion bond to offset expenses stemming from deal delays. 
• A contract clause forces Paramount to pay WBD shareholders about $650 million per quarter starting September 30.
• Though federal and global regulators approved the $110-billion mega-merger, state antitrust litigation has pushed the potential closing date back to June 2027. 

Paramount Skydance (PSKY) filed a motion on Monday requesting that a federal judge order a group of state attorneys general to post a $1.88-billion bond to cover rising costs associated with the delay of its pending $110 billion merger with Warner Bros. Discovery.

The legal filing targets a coalition of 12 states led by California Attorney General Rob Bonta, who filed an antitrust lawsuit in July seeking to block the transaction. 

State prosecutors argue that combining the two Hollywood production houses violates the Clayton Antitrust Act by stifling competition in film production, pay-TV networks, and streaming services such as HBO Max and Paramount+.

While the case is scheduled for trial in March, Paramount agreed last month to delay finalizing the acquisition until as late as June 2027, missing its original target completion date of late September.

Escalating Expenses

In its filing, Paramount contended that under the Clayton Act and federal rules, plaintiffs seeking preliminary relief to halt a commercial transaction must provide financial security for potential losses.

The requested $1.88-billion figure reflects estimated financing expenses and mandatory "ticking fees." Under the transaction terms, Paramount must pay Warner Bros. Discovery shareholders an extra 25 cents per share every quarter starting September 30 until the merger concludes. These fees total about $650 million quarterly and are expected to reach an estimated $1.3 billion in non-refundable payouts by the time trial arguments conclude.

"Absent security, even a complete victory on the merits would not restore a dollar of those extraordinary losses," Paramount stated in its court submission.

Broader Industry Fallout

The Department of Justice’s Antitrust Division and international regulatory agencies have already approved the transaction. Beyond direct financial penalties, Paramount warned that the prolonged legal battle risks invalidating those hard-won regulatory clearances while harming operational integration, talent investments, and worker morale at both companies.

The state coalition suing to halt the deal comprises California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. Representatives for the California Attorney General's office did not immediately comment on the bond motion.

PSKY, WBD Stock: Retail View 

Retail sentiment on Stocktwits was ‘bullish’ for PSKY and was ‘neutral’ for WBD. 

PSKY stock has lost 24% year-to-date, and WBD stock has lost 3% during the same period. 

Read More: Bond Market Triggers Wall Street Risk Warnings As Long Yields Surge

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