Paramount Sues Warner Bros as Netflix Deal Triggers Proxy Fight

A high-stakes battle for control of Warner Bros. Discovery (WBD) has taken a dramatic legal turn. Paramount Skydance, led by CEO David Ellison, has sued Warner Bros. in Delaware’s Court of Chancery, demanding detailed financial disclosures tied to WBD’s $82.7 billion deal with Netflix. The lawsuit escalates a fierce takeover fight that could reshape the future of Hollywood’s most valuable film and television libraries.

At the same time, Paramount announced plans to nominate its own slate of directors to the Warner Bros board, setting the stage for a proxy fight as shareholders weigh competing bids.

Why Paramount is suing Warner Bros

According to court filings, Paramount is seeking access to the financial analysis underpinning Warner Bros’ decision to back Netflix’s cash-and-stock offer over Paramount’s $30-per-share all-cash bid, which values WBD at approximately $108.7 billion.

Paramount argues that investors lack critical information about how Warner Bros valued its cable TV spinoff, studio assets, streaming operations, and so-called “risk adjustments” applied to Paramount’s offer. The company says these disclosures are essential before its tender offer expires on January 21.

“Time is of the essence,” Paramount stated in the lawsuit, emphasizing that shareholder decisions on tendering shares could hinge on the withheld data.

Cash versus complexity

At the heart of the dispute is the deal structure. Paramount insists its all-cash offer is simpler, more valuable, and more likely to clear regulatory hurdles than Netflix’s proposal, which includes spinning off Warner Bros’ cable networks.

Warner Bros, however, has repeatedly rejected Paramount’s advances and urged shareholders to back the Netflix transaction. The company has also warned that walking away from the Netflix deal would trigger a $2.8 billion termination fee, contributing to roughly $4.7 billion in exit costs.

Paramount has dismissed the cable spinoff as “virtually worthless” and is pushing for a bylaw amendment requiring shareholder approval for any separation of WBD’s cable business—an effort widely seen as a direct challenge to the Netflix deal structure.

Proxy fight looms as pressure mounts

Beyond the courtroom, Paramount is intensifying its pressure by preparing to nominate directors to Warner Bros. ’ board. The move signals a willingness to take the fight directly to shareholders if the board refuses to engage.

Despite the escalation, Paramount has not raised its bid, prompting skepticism from analysts.

What this means for Warner Bros, Netflix, and investors

For Warner Bros shareholders, the coming weeks could be decisive. Paramount’s lawsuit aims to influence tender decisions ahead of its offer deadline, while Netflix waits on the sidelines as the legal and governance battle unfolds.

Warner Bros has called the lawsuit “meritless,” arguing Paramount has yet to address “numerous and obvious deficiencies” in its proposal. Netflix declined to comment.

With billions at stake and shareholder votes potentially looming, this showdown underscores how streaming consolidation, legacy media decline, and Wall Street pressure are colliding at the highest levels of Hollywood.