The drama escalates, as Paramount sues Warner Bros for rejecting its $108.4bn offer, and demands to know the details of its rebuffal. Days after its acquisition offer was rejected, Paramount Skydance has unleashed its lawyers. The studio has filed a lawsuit against Warner Bros Discovery, demanding to see how the numbers for its deal with ... Paramount is now suing Warner Bros over the whole Netflix thing
The drama escalates, as Paramount sues Warner Bros for rejecting its $108.4bn offer, and demands to know the details of its rebuffal.
Days after its acquisition offer was rejected, Paramount Skydance has unleashed its lawyers. The studio has filed a lawsuit against Warner Bros Discovery, demanding to see how the numbers for its deal with Netflix were worked out, and the reasoning for its rejection of Paramount’s recent $108.4bn offer.
Paramount boss David Ellison has also written a letter to Warner Bros’ shareholders, which you can find published on the former studio’s website. In it, he states that Paramount put in its $30 per share offer (equating to a total of $108.4bn) before Warner Bros had made its deal with Netflix, which he argues is inferior, both financially (it equates to $82.7bn) and strategically. It was when Warner chose Netflix’s offer over Paramount, Ellison writes, that his company directed the same offer at Warner’s shareholders.
“WBD has provided increasingly novel reasons for avoiding a transaction with Paramount,” Ellison writes, “but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer.”
Ellison also writes that a lawsuit has been filed with a court in Delaware, demanding disclosure over transactional information which he insists hasn’t previously been shared:
“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.”
Netflix had previously signed a deal to purchase Warner Bros last December, before Paramount whipped out its multi-billion offer days later. Warner Bros formally rejected that offer on the 7th January, citing “downside risks”.
Besides Paramount’s lawyers, there’s another, very orange problem on the horizon. According to TechCrunch, President Donald Trump recently shared an article on the social media platform Truth Social, ‘Stop The Netflix Cultural Takeover’, published by the hard-right website One America News.
The piece argues that if Netflix owns Warner Bros – and all the IP under its umbrella, such as DC Comics – then it would become a “dominant cultural gatekeeper”. It also suggested that Warner’s board members picked Netflix over Paramount because “Netflix was the woker, ideologically preferred buyer.”
“It is time to say no to a woke media monopoly before the damage becomes impossible to reverse,” the article concluded.
Trump has longstanding links to Larry Ellison, the billionaire father of Paramount chairman David, and has previously said that there “could be a problem” with Netflix’s takeover of Warner Bros.
It’s therefore possible that the whole Netflix-Warner deal ends up being blocked by the Federal Trade Commission – at the behest of Trump.
Warner Bros has since called Paramount’s lawsuit “meritless”, writing in a statement (via AV Club):
“Despite six weeks and just as many press releases from Paramount Skydance, it has yet to raise the price or address the numerous and obvious deficiencies of its offer. Instead, Paramount Skydance is seeking to distract with a meritless lawsuit and attacks on a board that has delivered an unprecedented amount of shareholder value. 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.”
It’s a murky situation involving some very rich people, and is likely to drag on, exhaustingly, for months.
