David Ellison’s Paramount Skydance beat earnings estimates on Tuesday — but the media mogul and his billionaire father may need to get their checkbooks ready.
Paramount is expected to need to pay Warner Bros. Discovery shareholders more than $1 billion in so-called ticking fees after a federal judge set the date for the trial about its merger: March 2.
The Ellisons and Paramount’s other financial backers agreed to pay WBD investors $650 million per quarter, which is about $7 million per day, that its merger isn’t finalized, starting after September 30.
There are 169 days between October 1 and March 19, which is when Paramount’s trial is scheduled to end.
That implies Paramount would owe WBD shareholders about $1.18 billion, unless the company reaches a settlement with the 12 states suing to block its deal.
If Paramount doesn’t complete its merger with WBD, it would owe WBD a $7 billion termination fee under the agreement.
A Paramount spokesperson said in a statement that the company would “respect the court’s decision” about the trial date.
Second-quarter results were solid
Paramount’s second-quarter revenue and earnings came in slightly above the estimates of analysts surveyed by Bloomberg:
- Revenue: $6.91 billion, vs. estimates of $6.89 billion.
- Adjusted EBITDA: $1.099 billion, vs. estimates of $0.93 billion.
Shares were little changed in after-hours trading.
