India, Jan 13 : Hollywood is witnessing a high stakes corporate showdown as Paramount Skydance has filed a lawsuit against Warner Bros. Discovery (WBD) over its Netflix deal, escalating an already tense takeover attempt into an all out legal and proxy war.
At the centre of the conflict is David Ellison, CEO of Paramount Skydance and son of Oracle co-founder Larry Ellison. Frustrated by repeated rejections of Paramount’s $30-per hare cash offer, Ellison has taken WBD to Delaware Chancery Court, demanding detailed financial disclosures about WBD’s $83 billion Netflix transaction, warning shareholders that crucial information about the deal is missing.
Hostile takeover turns legal
Paramount’s lawsuit seeks to force WBD to explain how the Netflix deal was valued, including pricing of its Global Networks business, debt reductions, and risk adjustments. Paramount claims shareholders are being kept in the dark and cannot make informed decisions without full transparency.
Simultaneously, Paramount has announced a proxy fight, intending to nominate its own board candidates at WBD’s 2026 shareholder meeting and push for bylaw changes requiring shareholder approval for any Global Networks separation.
WBD pushes back
WBD dismissed Paramount’s lawsuit as “meritless” and criticized Ellison for relying on legal action instead of increasing his cash offer. The company maintains that Paramount’s $30-per share bid remains insufficient to justify a takeover.
Why the Netflix deal is under scrutiny
Under WBD’s agreement with Netflix, the streaming giant will pay $27.75 per share for WBD’s film and TV studios, HBO, HBO Max, and the games division, while spinning off Discovery Global including CNN, TBS, HGTV, Food Network, and Discovery+ in the third quarter of 2026.
Paramount argues that, according to WBD’s own projections, Discovery Global shares could be worth nothing, making the Netflix deal worse than Paramount’s all cash offer.
The proxy war ahead
Ahead of the shareholder meeting, Paramount plans to campaign against the Netflix deal, nominate its own board members, and push for shareholder control over any structural changes. Despite the legal and public battle, Ellison has indicated that Paramount remains open to constructive discussions, though his patience is clearly running thin.