Warner Bros. Discovery executives are privately claiming Paramount Skydance’s latest moves to pressure it into a merger amount to “gimmicks” likening Paramount’s maneuvers to a 1960s screwball sitcom and saying the company should instead simply sweeten its offer by a “couple of bucks” if it wants to clinch a deal, On The Money has learned.
The chatter comes as the brain trust at Paramount Skydance – run by Hollywood director David Ellison and his mega billionaire father Larry Ellison – announced on Monday that they are launching a proxy fight for control of the board and filing a lawsuit in Delaware to force engagement with its $30-per-share all-cash offer.
In response, a senior WBD executives called the lawsuit a “dud,” and “something out of ‘F-Troop,’” a reference to the comedy show about an inept and farcical cavalry regiment in the Wild West.
“These guys have no idea what they’re doing,” the senior WBD executive said. “They want to elect more board members? Well go to shareholders; there’s a process. In terms of this lawsuit, it’s a joke. It’s like when F-Troop fired the cannon, and the ball just dropped out of the barrel.”
The Ellisons’ latest salvo marks a significant escalation in the battle to control WBD, the media conglomerate that at least for now controls the top-notch Warner studio, HBO Max streaming service as well as cable properties CNN, TNT and Discovery.
Meanwhile, over the weekend Trump posted on Truth Social an opinion piece headlined “Stop the Netflix Cultural Takeover,” suggesting he isn’t so keen on the streaming giant getting bigger. Many conservatives have long decried the programming on the streaming giant as pushing culturally progressive themes.
Paramount’s last volley via a press release on Monday confirms an early report in The Post that the Ellisons and RedBird were considering something known internally as “DefCon 1” and mounting a legal challenge to the deal.
Nevertheless, the reaction inside WBD has been a mixture of laughter and bewilderment.
People at WBD tell The Post that to elect new board members, the Ellisons would have to wait until the company’s June annual meeting, where the Netflix deal will be a near fait accompli. As for the lawsuit demanding information on how it values the Netflix deal as “superior,” all of that has been disclosed, they say, and just a fraction have so far committed their shares to Ellison’s bid.
Moreover, they remain open to the Ellisons owning the company. As one senior WBD executive put it, they would have to sweeten their all-cash bid by “a couple of bucks” a share.
Larry Ellison, who is worth $255 billion, would also have to guarantee the debt portion of his $78 billion offer because it relies on significant leverage “on a declining asset” given how cord cutting has reduced viewership of cable TV.
Netflix is just buying WBD’s Warner studio and HBO Max for $72 billion.
One issue WBD may not be considering seriously enough is increased White House skepticism about the Netflix deal. The combination of Netflix’s No. 1 streaming service with the No 3 service of HBO Max will invite a significant antitrust review and possible lawsuit to break up the deal.
Meanwhile, as The Post has reported, the scrutiny could extend to Netflix’s entire business model being something that has monopoly status in the streaming business where many Americans get their entertainment.
Then there’s president Trump’s opinion on this deal, which always matters. He has stated he will play an active role in determining his administration’s stance on WBD’s future given its importance in terms of news (CNN) and programming (HBO).
While Trump has a long friendship with Larry Ellison, an early MAGA supporter, the Netflix people have been cozying up to Trump with its lobby team setting up a long meeting with Trump and company CEO Ted Sarandos. “That meeting was key to getting our side of the story, how the antitrust implications are overblown,” said one person close to Netflix. “It lasted 2 hours because Ted (Sarandos) and the president got along great.”
In fact, under its strategy, Paramount has been arguing that the WBD-Netflix transaction could face prolonged antitrust scrutiny from the Justice Department, while the value of the stock portion continues to erode and a planned cable spinoff could be worth little more than $1 a share for WBD investors.
Paramount last month launched a hostile bid for the company, appealing to shareholders to accept its bid while accusing WBD’s board of breaching its fiduciary duties by refusing to engage with what it calls its financially superior proposal while the board backed the $72 billion deal with Netflix instead.
Last week, The Post reported that Paramount Skydance has shifted to what insiders dubbed “Plan D” — opting to play the long game by hammering investors and regulators on the regulatory, financing and valuation risks facing Netflix’s bid rather than immediately sweetening its own offer..
