Paramount Skydance seeks $1.9bn in merger lawsuit

Paramount Skydance has asked a court to require California, 11 other US states and the Writers' Guild of America to put up $1.9 billion while they sue to block its proposed merger with Warner Bros.

In a lawsuit filed on August 17, Paramount said the money would cover costs it says it would face if the deal is delayed. The company says a $7 million-a-day fee for Warner Bros. shareholders is due to begin if the $110 billion takeover is not completed by October 1.

If a judge approves the request at a hearing on August 19, the states and the Writers' Guild of America would be liable for the money if their legal challenge fails.

The merger bid would give Paramount Skydance control of assets including Warner Bros. Pictures, CNN and HBO Max. California Attorney General Rob Bonta and other states oppose the deal, arguing that it would harm filmmakers and moviegoers. Some movie-industry opponents say the combined company would cut Hollywood jobs and reduce film production, while news media groups have raised concerns about CNN's independence.

The US federal government, the European Union and the British government have already approved the takeover. Last week, Paramount Skydance chief David Ellison threatened to move the company out of California if Bonta did not negotiate over the lawsuit; Bonta called the threat "blackmail."