Paramount Owners Could Pay $9.8 billion if Warner Merger Falls Short

A new Bloomberg report indicates that Paramount’s owners could end up paying as much as $9.8 billion if the merger with Warner Bros. Discovery is not completed. According to deal documents, the Ellison family committed to covering the costs if the transaction is blocked for regulatory reasons or otherwise fails to close.

Of that total, $7 billion corresponds to the termination fee that would be paid to Warner Bros. Discovery shareholders. Another $2.8 billion would be used to reimburse Paramount for the amount paid to Netflix to end a previous agreement involving the company. Larry Ellison and a family fund committed to covering that amount through the purchase of new Paramount shares.

The issue returned to the spotlight after Paramount delayed the completion of the merger until June 2027, or until five days after the resolution of the lawsuits filed by 12 U.S. states and the Writers Guild of America (WGA), which are trying to block the deal.

If the acquisition is approved, the Ellison family and its partners will also take on the quarterly fees of approximately $650 million that will begin to be paid to Warner Bros. Discovery starting in October. If the deal falls through, those charges would no longer apply, but the multibillion-dollar penalty in the contract would take effect.