Paramount may need to pay at least an additional $1 billion to complete its acquisition of Warner Bros. Discovery, as a judge has set a March trial date for the antitrust case challenging the deal. The trial is scheduled to begin on March 2 and conclude by April 5, potentially incurring significant daily penalties if the transaction is not finalized.
Paramount is currently obligated to pay "ticking fees" starting October 1, calculated at 25 cents per share per quarter. This amounts to approximately $7 million daily for each day the deal remains unclosed. The trial's timeline, pushed to March at the request of state attorneys general, means Paramount could face substantial additional costs, potentially exceeding $1.3 billion, depending on the duration of the legal proceedings and the judge's ruling.
Paramount CEO David Ellison stated that the company is open to an out-of-court resolution but remains confident in winning at trial. He also asserted that financing for the deal is secured and not at risk. The company has agreed not to close the deal until the legal case is resolved or by June 1, 2027, whichever comes first.
Ellison has publicly addressed concerns that opposition to the deal is politically motivated, particularly regarding the future of CNN under his leadership. He stated in an op-ed that he has voted for candidates across the political spectrum and holds a mix of conservative and liberal views. However, some CNN staff have expressed skepticism about these assurances.
High-profile figures have publicly supported the proposed merger. AMC Theatres CEO Adam Aron penned an op-ed in Variety advocating for the deal, and Endeavor CEO Ari Emanuel has criticized the antitrust lawsuit in the Wall Street Journal and discussed it on CNBC.
Paramount has a deadline of March 4, 2027, to finalize the deal with Warner Bros. Discovery, which can be extended to June 4 due to regulatory considerations. If the deal were to fall through, Paramount would be subject to a $7 billion termination fee. This potential cost, combined with a $2.8 billion break-up fee previously paid to Netflix for canceling another deal, could amount to nearly $10 billion if the Warner Bros. Discovery acquisition fails.