RESOLVING THE LEDGER
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See the full story · 7 sourcesParamount Skydance CEO David Ellison's company may soon have to pay up to WBD investors. Gabe Ginsberg/Getty Images
Paramount Skydance beat revenue and earnings estimates, but its backers may soon have to pay up.
The trial for Paramount's proposed merger with WBD won't start until March 2, a federal judge ruled.
Paramount agreed to pay WBD shareholders about $7 million per day that its deal isn't closed, starting September 30.
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.
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