Judge Denies Paramount’s Motion to Fast-Track WBD Trial Over Netflix Deal

Paramount Skydance recently faced a setback in its legal efforts against Warner Bros. Discovery (WBD). A Delaware Chancery Court judge dismissed Paramount’s motion to expedite its lawsuit, which aimed to compel WBD to disclose financial details about its deal with Netflix.

Details of the Lawsuit

The lawsuit is particularly focused on understanding how WBD assessed its deal with Netflix and the potential spin-off of its Discovery Global networks. Furthermore, David Ellison, CEO and chairman of Paramount Skydance, is involved in a hostile takeover bid, offering $30 per share for WBD. This bid contrasts sharply with Netflix’s agreement, which values WBD’s studios and streaming business at $27.75 per share.

Judge’s Ruling

Judge Morgan T. Zurn ruled that Paramount did not demonstrate a risk of “irreparable harm” due to WBD’s alleged lack of transparency. The judge indicated that as a shareholder, Paramount would not face direct harm from WBD’s disclosures, particularly as it was not making decisions regarding its tender offer.

Paramount’s Response

Paramount expressed disappointment with the ruling, emphasizing that it impacts only the legal standing, not the merits of its claims. They urged WBD shareholders to question the board’s reluctance to provide the requested financial information. Paramount believes that full disclosure is crucial for shareholders to make informed decisions regarding their investments.

• Paramount’s tender offer expires on January 21, 2026.
• Paramount intends to initiate a proxy battle at WBD’s 2026 shareholder meeting.
• WBD labeled Paramount’s lawsuit as “meritless.”

WBD’s Position

In a statement, Warner Bros. Discovery labeled the lawsuit as an unserious distraction. They noted that Paramount had created its own timeline for the hostile takeover offer and could extend the expiration as needed. WBD also reiterated that there was no identified urgency for the expedited trial.

Implications for Shareholders

Paramount’s lawsuit seeks crucial financial evaluations, particularly regarding how WBD assesses the Discovery Global spin-off in relation to Netflix’s transaction value. Paramount claims Netflix’s deal equates to $27.42 per share, a significant bump since the announcement due to Netflix’s declining stock price. Additionally, Paramount’s evaluation suggests that Discovery Global may hold no value under the Netflix agreement.

As the situation unfolds, Netflix is reportedly preparing a revised all-cash offer to acquire WBD assets post the 2026 spin-off. This scenario continues to complicate the landscape for shareholders of both Paramount and WBD as they navigate these significant merger discussions and potential outcomes.