A California trial and a $7 million-a-day ticking fee from October 1, 2026 are raising pressure on Paramount Skydance’s bid for Warner Bros Discovery.
Larry Ellison and a family trust could be required to reimburse Paramount Skydance Corp for as much as $9.8 billion if its acquisition of Warner Bros Discovery Inc fails, reviving attention on a little-noticed backstop as the transaction runs into legal and regulatory resistance. The exposure comes from a $7 billion regulatory termination fee owed to Warner Bros if antitrust or other approvals sink the deal, plus the $2.8 billion Paramount paid Netflix Inc in February to abandon its own pursuit of Warner Bros. Paramount, led by CEO David Ellison, is now preparing to take the case to trial after a lawsuit from the California attorney general emerged as a key obstacle to closing. The merger terms also include a ticking fee starting on October 1, 2026 if the deal has not closed by September 30, adding roughly $7 million a day or about $650 million a quarter for Warner Bros shareholders. The latest turn underscores how litigation, not just federal and international regulatory review, is now central to the timetable for Ellison’s effort to combine Paramount, including CBS and its streaming services, with Warner, owner of HBO and CNN.