Paramount Sues Warner Bros. Over $82.7B Netflix Merger

Paramount Global has taken legal action against Warner Bros. Discovery (WBD) in the Delaware Chancery Court. CEO David Ellison announced the filing on Monday, seeking to compel WBD to release critical financial details concerning its pending $82.7 billion acquisition by Netflix.

The lawsuit centers on Paramount’s attempt to sway WBD shareholders toward its own competing proposal: an all-cash offer valued at $30 per share. According to Ellison, WBD management has deliberately withheld essential data that would allow investors to accurately compare the two deals.

Demanding Financial Transparency

In a formal communication to shareholders, Ellison argued that the board of WBD has failed to provide standard financial disclosures required for an informed investment decision. The legal challenge specifically targets the lack of transparency regarding:

• The valuation methodology used for the Netflix transaction.
• The mechanisms behind debt-related purchase price adjustments.
• The specific basis for WBD’s “risk adjustment” claims regarding Paramount’s $30-per-share offer.

Ellison stated, “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 emphasized that shareholders are being asked to support a deal without seeing how the board arrived at its recommendation.

The conflict escalated last week when WBD’s board formally rejected Paramount’s latest bid, citing concerns over potential regulatory hurdles and the risk of the deal failing to close.

Political and Regulatory Scrutiny

The proposed merger is facing mounting pressure beyond the courtroom. Former President Donald Trump recently signaled his opposition to the deal on Truth Social, sharing commentary that labels Netflix as a potential “cultural gatekeeper” if it succeeds in absorbing Warner Bros.’ assets. Trump had previously met with Netflix co-CEO Ted Sarandos in December and later indicated that the scale of the acquisition could pose a significant problem.

Opposition is also intensifying on Capitol Hill. A group of senators, including Elizabeth Warren, Bernie Sanders, and Richard Blumenthal, have warned that the consolidation could harm consumers. They argue that the merger may lead to higher subscription costs, further straining middle-class budgets following recent price increases implemented by Netflix.

Additionally, the Writers Guild of America (WGA) continues to challenge the acquisition on antitrust grounds. While Netflix co-CEOs Greg Peters and Sarandos issued a letter last month attempting to mitigate industry fears regarding job security and theatrical distribution, labor groups and lawmakers remain unconvinced of the deal’s benefits for the broader media landscape.

For more details on the competing proposals, read the full update from Paramount here.