Paramount Skydance is currently engaged in a high-stakes legal and corporate battle against Warner Bros. Discovery (WBD) following a rejected hostile takeover attempt.
On January 12, 2026, Paramount filed a lawsuit in the Delaware Court of Chancery against Warner Bros. Discovery and its CEO, David Zaslav. Paramount is seeking to force WBD to disclose the financial analysis and “math” behind its decision to accept an $82.7billion merger with Netflix over Paramount’s higher $108.7billion all-cash offer.
Paramount CEO David Ellison claims WBD’s board breached its disclosure duties by failing to provide shareholders with enough information to compare the two deals fairly.
Paramount’s offer is for the entire company at $30 per share, whereas the Netflix deal only includes the film and TV studios and HBO, requiring WBD to spin off its cable networks (CNN, TNT, and others) into a new entity called Discovery Global. Paramount argues these spun-off shares may be nearly worthless.
Debt disclosure dispute at heart of legal fight
Paramount accused WBD of withholding critical details from shareholders about Discovery Global, particularly the final debt load it would assume. WBD clarified that Discovery Global’s target net debt stands at $17billion on June 30, 2026, dropping to $16.1billion by December 31, 2026, with Netflix agreeing to cut this by $260million under revised terms.
Paramount warned that shifting any part of the $17billion debt back to WBD’s streaming and studios from Discovery Global would directly lower the per-share payout to WBD shareholders in the Netflix deal.
Despite the fact that the capital structure of Discovery Global will directly determine the actual amount WBD shareholders receive in the Netflix transaction, and WBD will be required to disclose such information as well as full financial information about Discovery Global at the time of the separation, WBD plans to solicit shareholder approval for the Netflix transaction without this information.
Paramount Skydance’s statement
Judge rejects Paramount’s request to expedite case
On January 15, a Delaware judge rejected Paramount’s request to expedite the case, stating Paramount failed to show “irreparable harm” that would justify fast-tracking the proceedings.
Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix. It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme. We are confident in our ability to achieve regulatory approval for the Netflix merger and look forward to delivering the tremendous and certain value our agreement will provide to Warner Bros. Discovery shareholders.
Warner Bros. Discovery’s statement
Proxy Fight: Paramount nominates directors to WBD board
Beyond the courtroom, Paramount is launching a proxy fight to take control of WBD’s board. Paramount intends to nominate its own slate of directors to the WBD board during the 2026 annual meeting. These directors would be tasked with reconsidering Paramount’s offer and potentially blocking the Netflix merger. Paramount has extended its tender offer deadline to February 20 to give WBD shareholders more time to pledge their shares.
South Park streaming rights battle adds to tensions
The two companies have also been locked in a separate legal battle since 2023 over the streaming rights to South Park. WBD sued Paramount for over $500 million, alleging Paramount breached a 2019 agreement by steering South Park specials to its own service, Paramount+. Paramount countersued for unpaid licensing fees. These cases are still pending, though a successful takeover by Paramount would likely lead to them being dropped.
Read more:
Netflix ups Warner Brothers bid to all-cash offer
Paramount Skydance’s $108.4b counter-bid for Warner Bros Discovery
Netflix acquires Warner Brothers Discovery
