Paramount CEO David Ellison announced on Monday that the company has filed a lawsuit against Warner Bros. Discovery (WBD) in the Delaware Chancery Court. The suit demands greater financial disclosure about Netflix’s $82.7 billion acquisition of Warner Bros. assets.
In a letter to shareholders, Ellison stated that WBD has failed to provide essential information. The lawsuit requests details on how WBD valued the overall Netflix transaction, how the purchase-price reduction for debt functions in that deal, and the basis for its “risk adjustment” of Paramount’s $30-per-share all-cash offer. Ellison argued that shareholders need this data to decide whether to accept Paramount’s competing bid, which he described as superior to Netflix’s.
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 added, “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.”
Last week, WBD’s board rejected Paramount’s latest bid, citing the risk that the Netflix merger could fall through.
President Trump has also voiced opposition to the merger. Over the weekend, he shared an opinion piece titled “Stop the Netflix Cultural Takeover” by John Pierce on Truth Social. The piece, published in One America News last month, warned that Netflix acquiring Warner Bros.’ streaming and studio assets would make it “the most dominant cultural gatekeeper the United States—and much of the world—has ever seen.”
Trump met with Netflix co-CEO Ted Sarandos in December and indicated that the merger “could be a problem” because Netflix already holds significant market share, which would expand further with the acquisition.
The industry has reacted negatively to the proposed Netflix-Warner Bros. merger. Concerns include job losses, the future of theatrical releases, and reduced representation of diverse voices in film and television.
Netflix co-CEOs Greg Peters and Ted Sarandos addressed these issues in a letter last month.
The Writers Guild of America (WGA) opposes the acquisition, citing potential violations of antitrust laws.
Lawmakers have raised alarms as well. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal warned that the merger could increase consumer costs and add financial strain on middle-class families, particularly after Netflix’s recent price hike.
