Paramount SkyDance Sues Warner Bros. Discovery Due to Netflix Deal

Summary

• Warner Bros. Discovery has officially labeled Paramount Skydance’s recent lawsuit as “meritless”
• Paramount filed the suit in Delaware to compel transparency over WBD’s $82.7 billion USD deal with Netflix
• WBD’s board maintains that Paramount’s $30 USD all-cash offer remains inferior to the Netflix agreement

Warner Bros. Discovery (WBD) has publicly dismissed a lawsuit filed by Paramount Skydance as “meritless,” signaling a further entrenchment in the hostile takeover battle between the two media conglomerates. The response follows Paramount’s filing in Delaware Chancery Court earlier this week, which sought to force WBD to disclose the specific financial valuations used to justify its pending $82.7 billion USD merger with streaming giant Netflix over Paramount’s own $108.4 billion USD all-cash tender offer.

The conflict centers on WBD’s decision to reject Paramount’s hostile bid in favor of a strategic combination with Netflix. Paramount Skydance, led by CEO David Ellison, argues that WBD shareholders are being kept in the dark regarding the true value of the Netflix deal, specifically the valuation of the “Global Networks” cable assets (including CNN and TNT)that would be spun off as a separate entity. Paramount claims their analysis values this “stub equity” at zero, making their own guaranteed $30 USD-per-share cash offer the financially superior option.

WBD’s board, however, continues to urge shareholders to reject the Paramount offer, citing significant debt risks and regulatory uncertainties. In a statement addressing the lawsuit, WBD reiterated that Paramount “has yet to raise the price” of its bid despite repeated rejections. The company maintains that the Netflix agreement offers a more secure strategic future, despite the lower headline valuation compared to Paramount’s $30 USD-per-share proposal.

In addition to the lawsuit, Paramount has signaled its intent to nominate a new slate of directors at WBD’s 2026 annual meeting and will propose bylaw amendments to require shareholder approval for the cable network spin-off. This escalation suggests the battle for one of Hollywood’s most valuable content libraries, spanning Harry Potter, DC Comics, and HBO, will likely be decided by a shareholder vote in the coming months.

The situation remains fluid as both sides vie for shareholder support ahead of the January 21 tender offer deadline. No official date has been set for the shareholder vote on the Netflix merger.