Paramount has filed a lawsuit against Warner Bros. Discovery seeking financial details about Netflix’s $82.7 billion bid, as pressure grows over a merger that would further concentrate power in the global streaming and film industry.
Paramount Lawsuit And Shareholder Dispute
Paramount chief executive David Ellison said on Monday that the company has brought the case in the Delaware Chancery Court, accusing Warner Bros. Discovery of failing to provide shareholders with key financial information about Netflix’s proposed acquisition. Ellison said the missing disclosures prevent investors from properly comparing Netflix’s offer with Paramount’s competing proposal of $30 per share in cash.
In a letter to shareholders, Ellison said Warner Bros. Discovery has not explained how it valued the Netflix transaction, how debt would affect the purchase price, or how it applied what it called a “risk adjustment” to Paramount’s offer. He said WBD shareholders need that information to make an informed decision.
Ellison wrote that while WBD has offered various reasons for not pursuing a deal with Paramount, it has not stated that Netflix’s proposal is financially superior to Paramount’s bid.
Board Rejection And Political Reaction
Warner Bros. Discovery’s board rejected Paramount’s latest bid again last week, saying the proposal carried too much risk of failing to close.
The merger has also drawn political attention. President Donald Trump shared a critical opinion piece on Truth Social over the weekend titled “Stop the Netflix Cultural Takeover,” written by John Pierce and published by One America News. Pierce argued that a Netflix acquisition of Warner Bros. assets would create the most dominant cultural gatekeeper the United States and much of the world has seen.
After meeting Netflix co chief executive Ted Sarandos in December, Trump said the deal could be a problem because Netflix’s existing market share would grow significantly if the acquisition goes ahead.
Industry And Labor Response
The proposed merger has prompted concern across the entertainment industry about its effect on jobs, theatrical releases, and representation in film and television. Netflix co chief executives Greg Peters and Sarandos addressed those issues in a letter last month, but opposition has continued.
The Writers Guild of America has said the deal violates antitrust law. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal have warned that the merger could increase consumer costs and add to financial pressure on middle class households, particularly after Netflix’s recent price rise.
Featured image credits: Flickr
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