Paramount Skydance Corp. (PSKY) is playing hardball. The company has asked a federal judge to make California Attorney General Rob Bonta and 11 other state attorneys general, along with the Writers Guild of America (WGA), put up a $1.88 billion bond as they challenge its proposed merger with Warner Bros. Discovery (WBD).

The court filing, submitted Monday, argues that the plaintiffs should post a bond to cover some of Paramount's costs, including the "ticking fees" it promised to Warner shareholders if the deal drags past its expected September closing. The Los Angeles Times first reported the filing.

Here's the kicker: the states don't have to fork over the full $1.88 billion right now. They just need to produce a portion by September 30. But if they lose their lawsuits, they'd be on the hook for the entire amount. That's a big financial risk for a group of Democratic attorneys general who are trying to block the deal on antitrust grounds.

The filing, signed by former federal prosecutor Danielle Sassoon, leans on the Clayton Antitrust Act to pressure the states and the WGA. It's a strategic move to make the plaintiffs think twice about their legal fight.

Paramount Faces Mounting Deal Pressure

Monday's court filing highlights the financial strain Paramount is under from the delay. If the Warner acquisition trial drags on, Paramount could owe up to $1.3 billion in ticking fees, especially if a decision comes after some regulatory approvals expire. The deal must close by October 1, or Warner Bros. Discovery could demand a $7 billion breakup fee. That's a lot of zeros.

Meanwhile, Bonta's office isn't taking the bond request lightly. They accused Paramount of trying to pressure them into backing down. It's a classic legal chess match, but with billions at stake.

Earlier this month, Paramount Skydance CEO David Ellison defended the deal, arguing that the antitrust lawsuits are less about competition and more about whether he can be trusted to oversee CNN. He pledged to keep the network's journalism independent and fact-based, saying his mixed political views wouldn't influence newsroom coverage. That's a direct response to critics who worry about political bias in the merger.

Final Merger Hurdle

The proposed $110 billion acquisition of Warner Bros. Discovery by Paramount has been facing growing opposition. In July, SAG-AFTRA, the actors' union, backed the multistate legal effort to block the deal. That added more firepower to the opposition.

On Friday, Paramount said it secured Mexico's approval for the merger, leaving just 12 state attorneys general opposing the deal. With regulatory clearance from 68 countries, Ellison is urging the states to settle rather than take the case to trial. He's essentially saying, "We've got the world on board, why are you holding out?"

As for the stock, PSKY is down 22% year-to-date, but it ended Monday 1.38% higher at $10.28. Investors seem to be watching the legal drama closely, but the market's reaction is mixed.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.