A ticking fee is an amount added to the price of a pending acquisition for every day that completion slips past an agreed date. It exists because most cash takeovers fix the price at signing and pay it "without interest" whenever the deal closes, which can be a year or more later if regulators intervene. Target shareholders carry that wait. A ticking fee shifts part of its cost to the buyer and gives it a reason to finish quickly. Bankers use the same phrase for a charge on committed loan money not yet drawn.

In media, the merger version now dominates. Warner Bros. Discovery shareholders are owed $0.25 a share for each quarter that Paramount's $31-a-share acquisition remains open after September 30, 2026, a cost put at about $7 million a day. As of September 27, 2026, the deal had not closed.

How the fee accrues

Everything sits in the merger agreement. The parties set a base price per share, a start date after which the fee accrues, a daily or monthly amount and an outside date, often extendable while approvals are pending, after which either side may walk away. According to an October 2013 note from law firm Kirkland & Ellis, the start can be tied to signing, a fixed date or an event such as that extension, and the rate can rise in steps. Clauses commonly stop the clock where the seller caused the delay.

Nothing changes hands while the fee builds up. The accumulated sum becomes part of the merger consideration, paid at closing from the buyer's equity and debt. If the deal is terminated, the ticking fee disappears and any compensation must come from a separate reverse termination fee.

Rates vary. Clear Channel Communications' amended 2008 buyout agreement applied 4.5% a year to its $36.00 price from November 1, 2008, rising to 6% from December 1. TEGNA's 2022 agreement with Standard General added $0.05 a month to a $24.00 price from nine months after signing, climbing to $0.125 a month in the fifteenth month - roughly 2.5% to 6.3% a year.

A target's board and bankers use the term to test a bidder's confidence; the acquirer weighs it against remedies regulators may demand. Merger arbitrage funds, which hold target shares until completion, price the expected fee into what they will pay.

A worked example

According to Warner Bros. Discovery's definitive proxy statement, each share receives $31.00 in cash plus, for a closing after September 30, 2026, a Ticking Consideration of $0.00277778 multiplied by the calendar days elapsed after that date up to and including closing, capped at $0.25 per 90-day period.

A closing on October 15 would add about 4 cents a share. Paramount put the full quarterly cost at about $650 million, which implies roughly 2.6 billion shares and about $7.2 million a day. Against the $31 price, that is about 3.3% a year. A closing on June 1, 2027, the outer date in a July stipulation with state attorneys general, would bring 244 days of accrual: about 68 cents a share, or roughly $1.76 billion, in line with a CNBC estimate of about $1.7 billion.

Origins in the buyout boom

The device predates the 2008 financial crisis. Clear Channel's filings show a ticking fee in an earlier version of its agreement with a private equity group co-led by Bain Capital and Thomas H. Lee Partners, first signed on November 16, 2006. A May 2008 amendment replaced it with the two-tier structure, and the buyout closed on July 30, 2008, before the new fee applied.

By 2013 practitioners were describing a comeback. Law360 published "The Reappearance Of Ticking Fees In Delayed Closings" that August, and the Kirkland note reported "nascent signs of a resurgence", citing Service Corporation's purchase of Stewart Enterprises and Thermo Fisher's of Life Technologies, where the price rose by a fraction of a cent per day once the outside date was extended. In BP's 2012 sale of Western US assets to Tesoro, the buyer instead funded a daily deposit of $330,000, capped at $50 million, forfeited if antitrust clearance failed.

"Ticking fees and other similar bespoke increasing fee arrangements create a specific and quantifiable economic incentive for buyers to complete a deal in a timely manner," wrote the note's authors, Daniel Wolf, David Feirstein and Joshua Zachariah. A bidder in a contested auction, they added, could offer one to compete with rivals facing fewer antitrust overlaps.

Cravath, Swaine & Moore reported an uptick in ticking fees and reverse break-up fees in 2023, while a March 2024 Skadden publication still called ticking fees relatively uncommon. Kellanova proposed $0.14 a month on top of $83.50 a share in 2024 talks with Mars, its proxy shows; shareholders received $83.50 at closing in December 2025.

Paramount followed the contested-auction playbook. On February 10, 2026, while Warner Bros. Discovery was still bound to its agreement with Netflix, Paramount added a $0.25 quarterly fee from January 1, 2027 to its unsolicited $30 offer, presenting it as a sign of confidence in regulatory approval. By February 26 the start had moved forward to after September 30, 2026, the price had risen to $31 and the regulatory termination fee stood at $7 billion.

Why media buyers are watching

EMARKETER projects ten major US TV groups shrinking to six by 2027, and two of the consolidations it counts rest on deals that have not closed. Until they do, the companies sell advertising separately: the July 24 stipulation barred Paramount and Warner Bros. Discovery from integrating operations, according to Paramount's quarterly filing, and the planned combination of Paramount+ and HBO Max into a service of about 200 million subscribers waits on the same date.

Pending deals also thin disclosure. Roku, which Fox agreed to buy on June 15, 2026, held no earnings call and issued no outlook with its second-quarter results. That deal pays $96 in cash plus 0.9693 Fox shares per Roku share and is expected to close in the first half of 2027. The joint proxy statement defines that consideration "without interest", with no ticking component; Roku's protection is a regulatory termination fee of about $1.24 billion.

Ad tech has its own queue. LiveRamp shareholders approved Publicis's $38.50-a-share offer on August 17, 2026, pending regulatory clearance, and Nielsen agreed a $13.60-a-share cash deal for DoubleVerify on August 6. Omnicom needed almost a year to complete its purchase of Interpublic.

Each quarter of delay would add roughly $650 million to a purchase that already leaves the combined Paramount carrying more than $80 billion in debt.

Limits and disputes

A ticking fee pays nothing if the deal dies. TEGNA's fee began accruing on November 22, 2022, while the Federal Communications Commission (FCC) reviewed the sale. The FCC referred it to an administrative law judge in February 2023, and TEGNA terminated the agreement on May 22, 2023. Shareholders received no ticking payment; the company collected a $136 million termination fee, settled in 8.6 million of its own shares. "It's midnight for Cinderella," Soo Kim, Standard General's founding partner, said as the deadline approached, according to Virginia Business.

A buyer can pay but cannot compel. Twelve states sued Paramount in July 2026, and a federal judge halted the mergerwith a temporary restraining order. Rates of 2.5% to 6% a year may also fall short of what shareholders lose if a target's business drifts during a long review.

Even the fee's history is disputed. PPC Land's March 2026 report on the bidding contest dated the fee's introduction to late December 2025; Paramount's filings with the Securities and Exchange Commission (SEC) place it on February 10, 2026.

Not the same as

Termination fee - paid by a target that walks away, typically for a better offer. Netflix recognised the $2.8 billion Warner Bros. termination fee in interest and other income in the first quarter of 2026; Paramount funded it.

Reverse termination fee - paid by a buyer when a deal fails, usually on regulatory or financing grounds. Adobe paid Figma $1 billion in December 2023. A ticking fee compensates for a slow deal that closes; a reverse termination fee compensates for one that does not.

Loan ticking fee - a commitment fee a borrower pays lenders on undrawn money, common in delayed-draw term loans. According to Ropes & Gray, syndicated ticking fees were often priced at half the loan margin, rising to the full margin after six months to a year; White & Case reported private credit lenders often charging a fixed 1% a year.

Locked-box ticker - a daily amount added to the price in European private deals, running from a historical balance sheet date to completion so the seller keeps the profits earned in between. It is routine, not a penalty for delay.

Recent developments

Twelve state attorneys general and the Writers Guild of America settled their suits on September 21, nine days before accrual was due to begin. The court has yet to approve the settlement; at a hearing on September 24 the judge questioned the parties about it, according to Variety. Chief executive David Ellison told staff on September 21 that closing was tentatively about two weeks away, according to Deadline. In a September 25 filing, Paramount said its shares would move to the New York Stock Exchange on or about October 6, while calling the timing of closing, if it happens at all, not yet certain.

Federal clearance came on June 12, and the European Commission approved the deal on July 22 on condition that Paramount leave the UIP distribution venture within 13 months. If closing slips past September 30, the fee starts on October 1.

Timeline

  • November 16, 2006: Clear Channel Communications signs its buyout agreement with a private equity group co-led by Bain Capital and Thomas H. Lee Partners
  • May 13, 2008: A third amendment replaces Clear Channel's earlier ticking fee with a two-tier fee of 4.5% and 6% a year on a $36.00 price
  • July 30, 2008: The Clear Channel buyout completes before the new fee applies
  • 2012: BP's sale of Western US assets to Tesoro includes a $330,000 daily deposit capped at $50 million
  • August 2, 2013: Law360 publishes "The Reappearance Of Ticking Fees In Delayed Closings"
  • October 9, 2013: Kirkland & Ellis reports nascent signs of a resurgence in ticking fees
  • February 13, 2018: Ropes & Gray describes delayed-draw term loan ticking fees moving into the syndicated loan market
  • February 22, 2022: TEGNA agrees to a $24.00-a-share sale to Standard General with a four-step ticking fee
  • November 22, 2022: TEGNA's ticking fee begins accruing
  • May 22, 2023: TEGNA terminates the Standard General agreement and becomes entitled to a $136 million termination fee
  • 2023: Cravath, Swaine & Moore reports an uptick in ticking fees and reverse break-up fees
  • March 2024: Skadden describes ticking fees as relatively uncommon
  • August 2024: Kellanova proposes a $0.14 monthly ticking fee during negotiations with Mars
  • December 5, 2025: Netflix agrees to buy Warner Bros.' studios and HBO Max
  • December 8, 2025: Paramount launches a $30-a-share all-cash tender offer for Warner Bros. Discovery
  • December 2025: Mars completes the Kellanova acquisition at $83.50 a share
  • February 10, 2026: Paramount adds a $0.25-a-share quarterly ticking fee from January 1, 2027
  • February 26, 2026: Warner Bros. Discovery's board declares Paramount's $31 proposal superior, with the fee brought forward to after September 30, 2026
  • February 27, 2026: Paramount and Warner Bros. Discovery sign a merger agreement; Paramount funds the $2.8 billion termination fee owed to Netflix
  • April 23, 2026: Warner Bros. Discovery shareholders approve the Paramount merger
  • June 12, 2026: The Justice Department clears the merger
  • June 15, 2026: Fox agrees to acquire Roku for $96 in cash plus 0.9693 Fox shares per share, without a ticking fee
  • July 2026: Twelve states sue to block the Paramount merger; a temporary restraining order follows on July 20
  • July 22, 2026: The European Commission clears the merger with conditions
  • July 24, 2026: Paramount agrees not to close before the earlier of five days after a merits ruling or June 1, 2027
  • September 21, 2026: Paramount settles with the states and the Writers Guild of America
  • September 25, 2026: Paramount files to move to the NYSE and states the closing date is not yet certain
  • October 1, 2026: The Warner Bros. Discovery ticking fee begins accruing if the deal remains open

Summary

Who: Acquirers and target companies in public takeovers, their boards, bankers and lawyers, and the shareholders and merger arbitrage funds who wait for closing. In lending, borrowers and the banks or private credit funds holding undrawn commitments. Current examples include Paramount Skydance and Warner Bros. Discovery.

What: A per-share amount added to a merger price for each day closing slips past an agreed start date, paid only if the deal completes. In lending, a fee charged on committed but undrawn loan money.

When: Used in the leveraged buyout era, including Clear Channel's buyout agreed in 2006 and amended through 2008, described as returning in 2013 and applied in TEGNA's 2022 deal. The Warner Bros. Discovery fee begins accruing after September 30, 2026 if the deal is still open.

Where: Mainly in US public-company merger agreements filed with the SEC, and in syndicated and private credit loan documents. European private deals use a related locked-box ticker.

Why: Fixed cash prices leave target shareholders bearing the cost of long regulatory reviews. A ticking fee prices that delay and gives buyers a reason to close quickly, though it pays nothing if the deal collapses.