Paramount CEO David Ellison announced that Paramount has filed a lawsuit against Warner Bros. Discovery in Delaware Chancery Court, seeking greater financial disclosure on Netflix’s $82.7 billion acquisition of Warner Bros. to enable shareholders to evaluate Paramount’s competing $30-per-share all-cash offer.
Ellison detailed the lawsuit in a letter to shareholders, stating that Warner Bros. Discovery has not provided essential information required for informed decision-making. The suit demands specifics on the valuation of the overall Netflix transaction, the mechanics of the purchase-price reduction for debt in that deal, and the basis for Warner Bros. Discovery’s risk adjustment applied to Paramount’s offer. Ellison emphasized that this disclosure represents customary practice for boards recommending investments to shareholders.
In his letter, Ellison wrote, “WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer.” He continued, “Along with the WBD shareholders, we have asked for the customary financial disclosure a board is supposed to provide shareholders when making an investment recommendation… WBD has failed to include any disclosure about how it valued the overall Netflix transaction, how the purchase price reduction for debt works in the Netflix transaction, or even what the basis is for its ‘risk adjustment’ of our $30 per share all‑cash offer. WBD shareholders need this information to make an informed investment decision on our offer.”
Warner Bros. Discovery’s board rejected Paramount’s latest bid last week, citing excessive risk that the Netflix merger might fail. This marks another refusal of Paramount’s overture amid ongoing preparations for the Warner Bros.-Netflix combination, which involves Netflix acquiring Warner Bros.’ streaming and studio assets.
President Trump voiced opposition to the merger over the weekend by sharing an opinion piece on Truth Social. The piece, titled “Stop the Netflix Cultural Takeover” and authored by John Pierce for One America News last month, argues that Netflix acquiring Warner Bros.’ assets would position it as “the most dominant cultural gatekeeper the United States—and much of the world—has ever seen.”
Trump’s stance follows a December meeting with Netflix co-CEO Ted Sarandos, during which Trump described the merger as “could be a problem” given Netflix’s existing substantial market share, which would grow considerably through the acquisition.
Reactions within the industry to the Netflix acquisition have centered on job losses, the viability of theatrical releases, and reduced representation of diverse voices in film and television production. Netflix co-CEOs Greg Peters and Ted Sarandos responded to these concerns in a letter released last month.
The Writers Guild of America maintains its opposition to the deal, pointing to potential violations of antitrust laws that regulate media consolidations.
Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal have cautioned that the merger could drive up consumer costs at a time when middle-class families face heightened financial strain, particularly after Netflix implemented a recent price increase on its subscriptions.
