Paramount Skydance is escalating its efforts to disrupt Warner Bros. Discovery's (WBD) proposed deal with Netflix, initiating a lawsuit and planning to nominate its own slate of directors to the WBD board. The moves are designed to increase pressure on WBD to consider Paramount's competing offer to acquire the company.
On Monday, January 12, 2026, Paramount Skydance filed a lawsuit against Warner Bros. Discovery in a Delaware court, seeking greater transparency regarding the financial details of WBD's $82.7 billion agreement with Netflix. Paramount is requesting "basic information" on how WBD has valued its global networks operation, including CNN, the Cartoon Network, and the Discovery Channel, which are not included in the Netflix deal. The lawsuit aims to allow WBD shareholders to make an informed decision regarding the Netflix agreement.
In addition to the lawsuit, Paramount intends to nominate directors for election to the WBD board at the company's annual meeting, typically held in June. Paramount hopes these directors will vote against the Netflix deal and consider Paramount's offer more seriously. To succeed in this "proxy fight," Paramount will need to convince a significant number of WBD investors to vote for its nominees, replacing existing or proposed directors from WBD's board. Paramount will also propose an amendment to WBD's bylaws to require shareholder approval for any separation of Global Networks. The "advance notice" window for WBD's 2026 annual meeting opens in three weeks.
Paramount argues that its $30-a-share cash offer, which includes the acquisition of global networks, is a more favorable option for WBD shareholders compared to Netflix's offer. The Netflix deal would give the streaming giant control over key WBD assets, including Warner Bros. studios (known for franchises like Harry Potter, Superman, and Batman) and HBO (home to popular shows like Game of Thrones, The White Lotus, and Succession). Paramount's bid amounts to $108.4 billion, supported by a $40 billion personal guarantee from Oracle co-founder Larry Ellison.
WBD's board has twice rejected Paramount's takeover bid, deeming it "inadequate" and highlighting risks associated with its structure as potentially the "largest LBO [leveraged buyout] in history". WBD also stated that accepting Paramount's deal would incur $4.7 billion in costs, including a $2.8 billion breakup fee to Netflix, additional interest on debt, and a $1.5 billion fee for failing to complete a debt exchange. The board reiterated its support for the Netflix offer on December 17, after Paramount issued an amended offer on December 22.
WBD responded to Paramount's lawsuit by calling it "meritless" and an attempt to distract from the weaknesses of Paramount's offer. They maintain that the Paramount Skydance has not raised its price or addressed the "numerous and obvious deficiencies of its offer". WBD argues that its board has delivered "an unprecedented amount of shareholder value" and unanimously concluded that Paramount's proposal is not superior to the Netflix merger agreement.
Despite the back-and-forth, Paramount CEO David Ellison insists that the WBD board has not fully engaged with Paramount's bid and has not adequately explained why it considers the Netflix bid to be better.
