Paramount Sues Warner Bros. Over Netflix Deal Disclosures, Plans Proxy Fight

Paramount Skydance has escalated its bid for Warner Bros. Discovery (WBD) by moving the dispute into court, adding a new legal front to the intensifying fight over control of the company.

On Monday, David Ellison’s Paramount filed a suit against WBD in Delaware Chancery Court, seeking to force the company to disclose financial details tied to its acquisition deal with Netflix. At the same time, Paramount officially announced plans to launch a proxy fight for WBD, saying it will nominate a slate of directors “who, in accordance with their fiduciary duties, will exercise WBD’s right under the Netflix Agreement to engage on Paramount’s offer and enter into a transaction with Paramount.”

The lawsuit follows WBD’s latest rejection of Paramount’s $30 per share cash bid, which values WBD at $77.9 billion in equity and $108.4 billion in enterprise value. Paramount’s offer seeks to acquire WBD in its entirety, encompassing the company’s cable networks along with its studio and streaming businesses. The WBD board declined the offer, marking the eighth proposal put forward by Ellison, whose backing includes his billionaire father, Oracle co-founder Larry Ellison.

By comparison, Netflix’s offer aims to acquire WBD’s studio and streaming assets only, valuing them at $27.75 per share. That offer carries an equity value of $72 billion and an enterprise value of $82.7 billion.

Paramount contends that its analysis shows the Netflix transaction assigns no meaningful value to the WBD’s Discovery Global spin-off, which includes the companies cable networks. At the same time, Paramount’s own bid acknowledges that, once debt and expected costs are factored in, the cable portfolio provides no incremental equity value, effectively valuing those assets at $0.00 per share in its recent letter.

In a recent letter to shareholders, WBD argued that Paramount’s proposal carries significantly more risk, calling it the “largest [leveraged buyout] in history with $87 billion of total pro forma gross debt”; that figure would exceed WBD’s debt level at its formation in 2022, following the merger of WarnerMedia and Discovery. WBD said that “the extraordinary amount of debt financing, as well as other terms of the [Paramount] offer, heighten the risk of failure to close, particularly when compared to the certainty of the Netflix merger,” which uses a mix of cash and stock backed by Netflix’s “investment grade balance sheet” and strong credit rating.

In an open letter to WBD shareholders on Monday, Ellison sharply criticized the company’s disclosures around the Netflix transaction. “WBD has failed to include any disclosure about how it valued the Global Networks stub equity, 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,” he wrote.

Ellison said Paramount’s lawsuit asks the court “to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer.”

Beyond the courtroom, Paramount is preparing to take its fight directly to shareholders. Paramount said it will seek changes to WBD’s bylaws at the 2026 shareholder meeting that would mandate shareholder approval for any Global Networks separation, and warned that if WBD holds a special meeting before then to vote on the Netflix deal, it will “solicit proxies against such approval.”

WBD issued a statement in response, criticizing Paramount’s proposal and motivations, “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.”

Featured image: Mario Tama/Getty Images

UPDATE (January 12, 2026, at 8:52 PM EST): This article has been updated to include a statement from Warner Bros. Discovery addressing Paramount’s actions. The featured image attribution has also been corrected.