Paramount Skydance escalates its battle over Warner Bros Discovery, pushing for board changes to block Netflix’s acquisition.
Paramount Skydance is suing Warner Bros Discovery (WBD), challenging Netflix’s $82.7bn deal and aiming to give shareholders the final say on which offer is best.
In a letter to WBD shareholders, Paramount chief exec David Ellison said the company had failed to provide the financial information shareholders need to make an informed decision, and argued the Netflix deal is financially inferior to Paramount’s $30-per-share all-cash offer.
“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,” Ellison wrote. “Our $30 per share in cash is simply more than Netflix’s complex multi-variable consideration.”
Paramount also announced its plans to nominate a slate of directors to WBD’s board who would oppose the Netflix deal and proposed a bylaw amendment requiring shareholder approval for any separation of Global Networks from the company.
“The best outcome for you and for us would be if WBD’s Board would exercise the right it has under the Netflix Agreement to engage with Paramount,” Ellison said. “If it does so, we will be open and constructive to secure the best path forward for WBD and each of you.”
WBD responds
On 12 January, WBD pushed back against Paramount’s lawsuit in a statement, dismissing it as without merit. The company said Paramount had failed to address the key issues in its offer or increase its price, instead focusing on legal action and public statements.
WBD also explained the lawsuit appeared intended to distract from the board’s decision, which it said had consistently delivered strong value for shareholders.
“In spite of its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix,” read the statement reported by AV Club.
A turning point in the takeover battle
The letter comes after WBD rejected Paramount’s tender offer in December 2025, reiterating its support for the Netflix acquisition. At the time, WBD said Paramount’s bid, while headline-grabbing at $108.4bn, was non-binding and exposed shareholders to significant execution, financing and governance risks.
The board argued Netflix’s offer, which combines cash and stock along with participation in Discovery Global, provides both immediate value and longer-term upside without reliance on third-party equity backstops.
Whereas Paramount’s tender offer depends on a revocable trust backed by the Ellison family, which WBD said offers limited protection if the deal fails to close.
While Paramount’s bid exceeds the headline value of Netflix’s transaction, the company warned the tender offer may not realistically complete within its proposed timeline due to regulatory approvals, debt arrangements and leverage concerns.
Accepting the offer would also trigger additional costs for shareholders, including a $2.8bn termination fee payable to Netflix and roughly $1.5bn in financing costs.
What comes next?
The lawsuit and Paramount’s planned board nominations now suggest the argument has entered a new stage, with shareholders potentially gaining the final say over which offer goes ahead.
“I believe in our vision for how we can bring these great companies together and deliver for consumers, the creative community and of course, for you,” said Ellison.
“Paramount is committed, my family is committed, and hopefully this helps answer the question of what comes next.
This story was first published by Affiliate Leaders’ sister title, Insider Sport.
