David Ellison\u2019s Paramount Skydance has asked a judge to force California Atty. Gen. Rob Bonta and his coalition of 11 other states to set aside as much as $1.9 billion as the Warner Bros. Discovery merger challenge heads into overtime.<\/p>\n
In Monday\u2019s court filing, Paramount requested the plaintiff states, including New York, Colorado, Oregon and Nevada, as well as the Writers Guild of America, post a bond that would cover some of its costs, including \u201cticking fees\u201d Paramount promised to pay Warner shareholders should the deal stretch beyond its anticipated September close. <\/p>\n
Ellison was confident that his proposed Warner takeover would sail through its regulatory clearances. President Trump\u2019s Justice Department approved the merger in June, as have dozens of other countries. <\/p>\n
The states would not be required to pay the full $1.88 billion upfront. Instead, they would have to come up with a portion of that amount by Sept. 30. Should the Democratic state attorneys general and WGA lose their lawsuits, they ultimately would have to pay the full amount.<\/p>\n
Monday\u2019s court filing highlights Ellison\u2019s frustrations and the financial pressures of the deal delays. The filing also continues Paramount\u2019s full-court political pressure campaign to get Bonta and the other states to abandon their antitrust lawsuit. <\/p>\n
Ellison also has floated a proposal to move Paramount from its historic home base on Melrose Avenue to Tennessee \u2014 or perhaps Texas \u2014 as early as this fall.<\/p>\n
\u201cOnce again, [Paramount is] trying to blackmail us to get us to back down,\u201d Bonta\u2019s office said Monday in a statement, blasting Paramount\u2019s latest maneuver. <\/p>\n
Paramount did not expect such a spirited challenge from Bonta and the 11 other Democratic state attorneys general who banded together with the WGA to try to block the $111-billion merger of two historic Hollywood studios. Paramount also would gain control of CNN (in addition to CBS News, which it already owns), HBO, HGTV and Turner Classic Movies.<\/p>\n
Paramount\u2019s 23-page filing, signed by former high-profile federal prosecutor Danielle Sassoon, was intended to rattle the states.<\/p>\n
Ellison\u2019s company is trying to create divisions among the plaintiff states by prompting them to question their resolve in fighting a potentially expensive legal battle, according to a person familiar with Paramount\u2019s strategy who was not authorized to speak publicly.<\/p>\n
Because the WGA has separately sued to unravel the deal, Paramount has asked the judge to have the union post a bond to cover some of the costs too. <\/p>\n
In its motion, Paramount cited the Clayton Antitrust Act, which is the foundation for Bonta\u2019s lawsuit<\/a>. The law contains a provision to require plaintiffs to post a bond to cover the potential financial harms of halting a transaction. <\/p>\n The bond gives a defendant, in this case Paramount, a way to recover lost funds should they ultimately prevail in court. Paramount has insisted the merger would not threaten competition and that Bonta\u2019s challenge is misguided.<\/p>\n With the approval of Mexican regulators last week, only the lawsuits from the WGA and Bonta and his coalition stand in the merger\u2019s way.<\/p>\n \u201cWe have satisfied all closing conditions under our merger agreement, having received regulatory clearances from 68 jurisdictions,\u201d Paramount said in a statement. \u201cThese two lawsuits are the only barrier to closing this transaction.\u201d<\/p>\n