Paramount began pitching a $44.4 billion debt offering to investors Monday to finance its takeover of Warner Bros. Discovery, even as a federal judge holds the final approval the deal needs.
The company, led by David Ellison, has cleared every condition but one. U.S. District Judge Araceli Martinez-Olguin must approve a proposed settlement of the antitrust lawsuit brought by 12 state attorneys general, led by California’s Rob Bonta. She declined to sign off at a hearing on September 24 and pressed the parties on how the terms answer the states’ competition concerns.
The pressure to close is growing. Beginning October 1, Paramount owes Warner Bros. Discovery shareholders a ticking fee of roughly $7 million a day, so each week of delay adds about $49 million. Ellison told staff earlier this month he expected the transaction to close within about two weeks.
The financing draws scrutiny of its own. Warner Bros. Discovery carried about $34 billion in debt and $3.4 billion in cash as of June, and the combined company’s annual interest bill is projected to run well over $6 billion. Critics of the deal have seized on that figure. Outside equity investors would receive newly issued nonvoting Class B shares at closing, and the Ellisons have reportedly courted Elon Musk and other wealthy individuals to join them.
The settlement itself has drawn opposition. Among other terms, it bars Paramount from selling either studio. Senator Cory Booker wrote to the judge urging an independent public-interest review before she enters the consent decree, and he said the remedies should be measured against the states’ original demand to block the merger outright. A group opposing the deal has pushed for the same scrutiny.
Lawyers for the states defend the compromise. Attorney Blizzard told the court, “If we block the merger, it would be forever.” She argued that a permanent bar would send Warner Bros. Discovery searching for another buyer, leaving the competition problem unsolved.
The Writers Guild of America, which filed its own suit, has also reached a settlement with Paramount. Both cases had been set for trial in March.
