Paramount Pictures has requested that a federal court require the parties opposing its proposed acquisition of Warner Bros. Discovery to post a $1.88 billion bond to cover costs associated with delays caused by their lawsuit. The lawsuit, brought by 12 states led by California alongside the Writers Guild of America, seeks to block the merger on antitrust grounds.

Earlier this year, a judge granted a temporary halt to the merger and set a trial date for March, prolonging the timeline for completion. This postponement has financial implications for Paramount, which under the terms of its agreement with Warner Bros. is obligated to pay $650 million per quarter if the deal remains unclosed by the October 1 deadline. Extended delays could result in Paramount owing Warner Bros. shareholders hundreds of millions of dollars.

The merger aims to consolidate two major Hollywood studios along with their associated streaming services and news outlets, including CNN and CBS News, into a single entertainment conglomerate. The plaintiffs argue that this combination would create a company with excessive market power, risking a reduction in competition in the industry.

Paramount counters that the deal is essential to achieving the scale needed to compete effectively with large technology companies such as Netflix, which have significantly expanded their presence in traditional media sectors. The ongoing legal dispute underscores the tension between regulators and media companies striving to consolidate in a rapidly evolving entertainment landscape.