Paramount Skydance said “time is of the essence” in its lawsuit seeking to force Warner Bros. Discovery to divulge more financial info about its deal with Netflix. But a judge disagreed with that assessment.
On Thursday, Delaware Chancery Court judge Morgan T. Zurn dismissed Paramount’s motion to expedite the lawsuit against WBD, which seeks details on how WBD valued the overall Netflix transaction as well as the proposed Discovery Global networks spin-off. David Ellison, Paramount Skydance’s CEO and chairman, is waging a hostile takeover bid aimed at persuading Warner Bros. Discovery shareholders that his company’s all-cash $30/share offer for WBD in its entirety is superior to Netflix’s agreement to buy Warner Bros.’s studios and streaming businesses for $27.75/share.
In the ruling, Zurn said Paramount had failed to show it would “suffer irreparable harm” because of Warner Bros. Discovery’s allegedly deficient disclosures. That’s because, as a shareholder, Paramount cannot be harmed directly by WBD’s purported lack of disclosures since Paramount is not making any decision on its own tender offer, according to the judge.
In a statement, Warner Bros. Discovery said: “Today’s lawsuit by Paramount Skydance was yet another unserious attempt to distract and the Judge saw right through it. We are pleased a Delaware Court agreed with our belief and rejected the notion that this lawsuit needed special treatment and may have other serious flaws. Despite its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix.”
Paramount Skydance said in a statement to Variety, “Today’s ruling (by the Honorable Morgan T. Zurn) was based on Paramount’s standing and does not pertain to the merits of Paramount’s claim. WBD shareholders need the information on the WBD Board’s evaluation of the Global Networks stub equity and the ‘risk adjustments’ performed on Paramount’s offer to make an informed decision. WBD shareholders should ask why their Board is working so hard to hide this information. Paramount continues to urge WBD to make these disclosures so that WBD shareholders can make an informed decision.”
Paramount had said in its motion for an expedited trial in the WBD case that, “There is a live investment recommendation, and stockholders are being asked to tender their shares now,” noting that Paramount’s tender offer currently expires on Jan. 21, 2026, “and cannot be extended indefinitely.”
“Full and complete disclosure allows stockholders to leave the sidelines and make fully informed decisions about tendering their shares and exercising their rights,” Paramount said in the motion.
Warner Bros. Discovery, in a court filing Wednesday opposing Paramount’s motion for an expedited trial, dismissed the move as “an exercise in urgency theatre — ringing a fire alarm in the absence of any flames or even smoke.” WBD noted that Paramount “set its own expiration date” of Jan. 21 for the hostile takeover offer and that Paramount “has the unilateral and unfettered ability to extend that expiration, and it admits that this offer is neither its ‘best and final’ nor even possible of closing any time this year. No other urgency is identified, and none exists.”
Also Monday, Paramount said it plans to launch a proxy battle by nominating a slate of directors for election at Warner Bros. Discovery’s 2026 shareholder meeting — who would be willing to “engage on Paramount’s offer and enter into a transaction with Paramount.” In addition, Paramount said it will propose changing WBD bylaws to require shareholder approval to for the Discovery Global spin-off.
Warner Bros. Discovery has called Paramount’s lawsuit “meritless” and said the company “has yet to raise the price” of its offer to acquire WBD in its entirety.
Paramount’s Jan. 12 lawsuit, which names Zaslav and WBD’s other board members as defendants, seeks to force the media company to disclose how it is valuing Discovery Global in the context of the value of the overall Netflix transaction, including how much debt WBD will be offloading to Discovery Global.
The details Paramount is seeking are crucial for shareholders to evaluate the total value of Netflix’s deal vs. Paramount’s offer, according to Paramount. According to Paramount’s Jan. 8 analysis, the total value of the Netflix transaction to WBD shareholders is $27.42/share, given the decline in Netflix’s share price since that deal was announced. And, according to Paramount’s parsing of the numbers, shares in Discovery Global have zero value under the Netflix deal (although it allowed that Discovery Global had a theoretical M&A value of 50 cents/share).
Meanwhile, amid Paramount’s pressure campaign, Netflix reportedly is prepping a revised, all-cash offer to buy the WBD assets. That transaction would be completed after WBD’s spin-off in the third quarter of 2026 of Discovery Global, which is set to include CNN, TBS, HGTV, Food Network and Discovery+.
