Paramount Sues Warner Bros. Discovery Over Netflix Deal, Launches Shareholder War

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The competition between Paramount and Netflix to acquire Warner Bros. Discovery has now turned into a full-blown legal dispute involving its shareholders.

Paramount Skydance has sued Warner Bros. Discovery, filing the lawsuit in Delaware court on Monday. The suit claims Warner Bros. Discovery’s board isn’t sharing important financial details with investors as it moves ahead with a proposed deal to sell itself to Netflix for $27.75 per share.

This lawsuit is one part of Paramount’s strategy to pressure the board and allow shareholders to directly consider their offer of $30 per share in cash.

Paramount’s Letter to WBD Shareholders

Paramount CEO David Ellison wrote an open letter to Warner Bros. Discovery shareholders detailing a more forceful plan to move ahead with their $30 million all-cash offer.

Paramount is suing Warner Bros. Discovery, asking them to reveal important financial information about their agreement with Netflix. Specifically, Paramount wants to know how the $3 billion in new company shares is valued and how taking on debt will affect payments to shareholders.

Paramount also intends to propose a new group of board members for Warner Bros. Discovery’s 2026 annual meeting. These nominees would be dedicated to seriously considering any offer Paramount makes. If Warner Bros. Discovery attempts to hold a vote on a merger with Netflix, Paramount will actively fight against it by soliciting votes from shareholders.

The company also plans to change its rules so that shareholders must approve any decision to separate its Global Networks, such as CNN, TNT, and Discovery, into a new, independent company.

Ellison blasted WBD’s board for refusing to even engage with Paramount, stating:

We’re still puzzled that Warner Bros. Discovery never responded to our offer from December 4th, or even discussed contract details with us. It’s hard to understand why they’d accept less than our $30 per share cash offer when we’re offering more.

The Lawsuit: Demanding Transparency

The lawsuit claims Warner Bros. Discovery didn’t share important financial details about the deal with Netflix. Specifically, it alleges they hid information about the true value of the spun-off cable business, how changes in debt impacted payments, and how the company evaluated Paramount’s offer considering potential risks.

According to Delaware law, shareholders have the right to easily understand financial details when considering different offers. Paramount alleges that Warner Bros. Discovery (WBD) is withholding this information.

This decision comes after weeks of criticism and increasing demands from investors and politicians, including President Trump. He recently shared an article criticizing Netflix’s attempts to dominate the media landscape and supporting Paramount’s stance.

This Is Now a Shareholder War

With this filing, Paramount has made one thing clear: it’s not going away quietly.

If Warner Bros. Discovery’s board members refuse to negotiate, Larry Ellison and RedBird Capital plan to seek their removal and prevent the deal with Netflix from going through.

As a Warner Bros. Discovery shareholder, I’m watching a really intense fight unfold over the future of the company. We’ve got Netflix making a complicated offer involving cash, stock, and potentially spinning off parts of the business. But then there’s Paramount, stepping up with a simpler, all-cash deal that actually pays more, and they’ve got some powerful people in their corner. It’s a tough situation, and we’re all waiting to see what happens next!

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2026-01-13 03:32