Paramount Accuses Warner Bros. Discovery of Biased Sale Process

Paramount, recently acquired by David Ellison’s Skydance Media, is pushing back on how Warner Bros. Discovery (WBD) is handling its ongoing sale discussions, questioning whether the process is being run in a fair and impartial way.

The company’s attorneys told WBD CEO David Zaslav they were concerned about the “fairness and adequacy” of the sale process, which began in October 2025. First-round, non-binding offers were submitted in late November, and this week, Paramount, Netflix, and Comcast submitted second-round bids for some or all of WBD’s assets.

Paramount’s letter, sent by law firm Quinn Emanuel, claims WBD appears to be steering the deal toward one preferred bidder at the expense of its fiduciary duty to shareholders.

“It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder,” the letter states.

The attorneys requested that the message be shared with WBD’s full board of directors.

WBD responded to Paramount, stating, “Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so.”

Paramount is specifically questioning whether management at WBD is favoring Netflix’s acquisition offer. CNBC reported that Netflix has proposed a bid consisting mostly of cash, while Paramount submitted an all-cash offer. Paramount, Netflix, and Comcast increased their bids from their initial offers, according to CNBC.

Sources told CNBC that as of Thursday morning, Netflix was being evaluated as the top bidder based on how WBD is weighing the deals. Comcast, meanwhile, has been cautious about its offer to avoid additional debt, maintaining a conservative approach to mergers and acquisitions.

According to CNBC, WBD could announce its chosen bidder as soon as next week.

Paramount has been pushing for a full acquisition of WBD since before the formal sale process began, submitting multiple offers that WBD ultimately rejected before opening the bidding to other buyers. Netflix and Comcast, in contrast, have shown interest only in WBD’s streaming and film studio division.

The current sale of WBD comes after earlier internal plans to divide the company into two separate entities—a standalone Warner Bros. operation led by CEO David Zaslav, and Discovery Global, which would oversee the cable networks under CFO Gunnar Wiedenfels—with the split expected to be finished in 2026. WBD had already begun separating its streaming and film studio business from its cable assets, aligning with the areas being targeted by Netflix and Comcast.

Paramount’s letter follows concerns that Zaslav has supported breaking up WBD from the start, according to CNBC, with people familiar with the matter saying he has viewed Netflix or Amazon as more likely suitors for a deal.

The letter also asks whether reports that WBD management has “chemistry” with Netflix executives are accurate, pressing the board to explain how it is preventing conflicts of interest during negotiations.

Paramount is asking whether the WBD board has put in place an independent committee of disinterested directors to oversee the sale and evaluate bids. If such a committee has not been formed, the letter urges one to be established.

“This would seem to be an important step at this stage, to ensure the fairness and unimpeachability of the transaction process and to maximize the value of whatever outcome WBD determines to pursue,” the letter reads.

Paramount’s full letter to Warner Bros. Discovery:

Dear Mr. Zaslav: We write on behalf of Paramount Skydance Corporation (“Paramount”, “we” or “us”) to express our serious concerns about the fairness and adequacy of the bidding process for a potential combination with Warner Bros. Discovery (“WBD” or “you”). It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder. We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.

We have recently seen reporting in the U.S. and foreign media that gives serious cause for concern. The German newspaper Handelsblatt recently reported on a meeting that reportedly took place in Brussels between Gerhard Zieler, President of WBD’s International Business and a direct report to WBD’s Chief Executive Officer, who “arrived with a three-person team,” with the E.U. Commission Vice President Hena Virkkunen, to discuss the potential merger prospects for WBD. In that conversation, the article reports that “concerns were raised that the Ellison family’s planned acquisition of Warner Bros. Discovery could lead to excessive media concentration,” and that the E.U. Commission would consider intervening in a potential merger with Paramount for this reason. The article quotes “sources close” to Zeiler as saying “that the talks with the Commission were important because both Warner and the EU wanted to preserve media diversity.” The implications of such a meeting, if it occurred, are clear and evince a tacit resistance to, if not active sabotage of, a Paramount offer.

While this report is concerning in itself, this is not an isolated report regarding purported WBD resistance to a combination with Paramount. Several U.S. media outlets have reported on the enthusiasm by WBD management for a transaction with Netflix, and on statements by management that a transaction between WBD and Netflix would be a “slam dunk,” while also referring to Paramount’s bid in a negative light. Additional reporting since the submission of revised bids on December 1 has indicated that WBD’s “board has really warmed to” a transaction with Netflix due to the “chemistry between” WBD management and Netflix management. We have come to you first to inquire whether this reporting is accurate, and to engage in a productive discussion with you around any actual or perceived issues that it may reflect.

Moreover, these media reports echo similar indications that we have been hearing throughout this process, despite what we viewed as otherwise productive conversations that we have had with WBD leadership. Paramount has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements. These concerns are amplified by indications of director bias and beholdenness to others whose interests may not align with the stockholders’, and the fact that alternatives involving only certain WBD assets are being prioritized notwithstanding their heightened regulatory risk and potential to deprive stockholders of consideration for the entirety of WBD’s enterprise value.

Further, as you know, Paramount agreed to certain standstill arrangements in exchange for the opportunity to participate in a truly competitive and unbiased bidding process. Paramount did not bargain for WBD to foster, whether intentionally or unintentionally, a tilted and unfair process. We believe that all parties to this process should have a shared desire for, and will mutually benefit from, an unimpeachable transaction process. As we assume you agree, even discounting the accuracy of any media reports, just the appearance of a flawed process imperils any potential transaction that might result and may undermine the potential value maximization to WBD stockholders from any prospective transaction.

In light of our grave concerns regarding the integrity of WBD’s process, we seek confirmation as to whether WBD has appointed an independent special committee of disinterested members of its board to consider the potential transaction opportunities and to make a final determination regarding a sale or break-up of all or part of the company. If not, we strongly urge you to empower such a special committee comprised of directors with no potential appearance of bias or beholdenness to others whose interests may differ from those of the stockholders. This would seem to be an important step at this stage, to ensure the fairness and unimpeachability of the transaction process and to maximize the value of whatever outcome WBD determines to pursue. Engaging with WBD throughout this process, we have been encouraged by the enormous potential from a combination of our entities. We remain confident that the Paramount offer would provide the maximum value to WBD stockholders and look forward to the opportunity to continue to engage with you productively in this process. But at this point we must insist on assurances and steps taken to ensure that a truly fair and independent process is being conducted, both for Paramount’s benefit and in the interest of WBD’s stockholders.