Paramount Drags Warner Bros. to Court Over Netflix Pact
Paramount Skydance has launched legal action against Warner Bros. Discovery, demanding transparency over the studio’s $83 billion arrangement with Netflix after repeated takeover bids were rebuffed.
Paramount Skydance has taken its ongoing corporate tussle with Warner Bros. Discovery (WBD) to the legal arena, following a string of unsuccessful acquisition attempts. The latest move sees David Ellison’s outfit filing a lawsuit in Delaware’s Chancery Court, seeking to compel WBD to reveal the financial intricacies of its colossal $83 billion transaction with Netflix. The suit, lodged on 12 January 2026, specifically targets WBD’s leadership, including CEO David Zaslav and the board, accusing them of withholding vital information from shareholders.
The legal complaint is not a sweeping attack—at least not yet. Paramount’s filing states:
“While the Board's conduct to date raises serious concerns and gives rise to various categories of fiduciary duty claims, Paramount brings this limited action now, seeking only disclosure of targeted material information, while reserving the right to seek further relief as appropriate. It does so because right now, WBD’s stockholders have an immediate need for the material information being withheld in order to make a decision on Paramount’s tender offer to them.”
Paramount’s aim, for the moment, is to force WBD to hand over details so shareholders can properly weigh up whether to accept the latest buyout proposal.
Behind Closed Doors: The Netflix Deal and Shareholder Frustration
Ellison, who chairs Paramount, has not been shy about his frustrations. In an open letter to WBD’s shareholders, he wrote:
“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.”
The lack of clarity, he argues, leaves shareholders in the dark at a critical juncture.
Paramount’s pursuit of WBD began in earnest in October 2025, when the latter started fielding offers from various suitors. Ellison’s company quickly emerged as a leading contender, with the CEO’s ambitions to become a major Hollywood power broker well known. Yet, in a twist that caught many off guard, WBD opted for Netflix in December, setting off a flurry of counteroffers and even a hostile takeover attempt from Paramount.
Industry Backlash and Political Undertones
The prospect of Netflix absorbing WBD has not been met with universal applause. Critics have voiced concerns about the implications for the film industry’s future, with some suggesting that Paramount’s own designs on WBD might be even less palatable. Ellison’s stewardship of Paramount has already sparked debate, particularly over his efforts to align the company with the Trump administration.
Paramount’s decision to revive Rush Hour 4 with Brett Ratner at the helm—reportedly at Trump’s behest—has raised eyebrows. Meanwhile, Ellison’s appointment of Bari Weiss, formerly of The Free Press, as head of CBS News has been contentious. Weiss has reportedly pulled stories critical of Trump from airing on 60 Minutes, and her overhaul of CBS News, alongside anchor Tony Dokoupil, has drawn sharp criticism in a matter of weeks. Ellison, it’s said, is also courting favour with Trump by promising to shake up CNN, a WBD property long in the president’s crosshairs.