Press Release: Warner Bros. Discovery Sets Special Meeting Date of March 20, 2026, And Unanimously Recommends Shareholders Vote FOR Netflix Merger; As Talks With Paramount Are Underway

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Warner Bros. Discovery, Inc. ("WBD") (NASDAQ: WBD) today announced that it will hold the Special Meeting of Shareholders (the "Special Meeting") to vote on the merger with Netflix, Inc. ("Netflix") (NASDAQ: NFLX) on March 20, 2026 at 8:00 a.m. Eastern Time and the commencement of mailing of the definitive proxy statement to shareholders in connection with the Special Meeting. WBD also announced today that Netflix has provided WBD a limited waiver under the terms of WBD's merger agreement with Netflix, permitting WBD to engage in discussions with Paramount Skydance ("PSKY") (NASDAQ: PSKY) for a seven-day period ending on February 23, 2026 to seek clarity for WBD stockholders and provide PSKY the ability to make its best and final offer. During this period, WBD will engage with PSKY to discuss the deficiencies that remain unresolved and clarify certain terms of PSKY's proposed merger agreement. Netflix retains its matching rights as defined by the merger agreement.

The WBD Board of Directors (the "WBD Board") continues to unanimously recommend in favor of the Netflix merger. The WBD Board also unanimously recommends that shareholders reject the PSKY offer, for the reasons set forth in the amendment to our Schedule 14D-9 filed today with the SEC.

Following receipt of PSKY's latest amended offer, a senior representative for PSKY informed a WBD Board member that, if the WBD Board authorized discussions, PSKY would agree to pay $31 per share and that the offer was not PSKY's "best and final" proposal. This price, along with several other matters that PSKY stated it would address in its February 10 letter, are not reflected in the latest merger agreement that PSKY proposed. To provide specific clarity in this regard, WBD has today sent PSKY a letter, included below, setting out the key issues yet to be addressed by PSKY, along with drafts of full transaction agreements for PSKY to confirm the terms of its offer.

"Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders," said David Zaslav, President and Chief Executive Officer of Warner Bros. Discovery. "Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer."

Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors added, "As announced today, we continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction's protections for shareholders against downside risk. With Netflix, we will create a brighter future for the entertainment industry – providing consumers with more choice, creating and protecting jobs and expanding U.S. production capacity while increasing investments to drive the long-term growth of our industry."

WBD today sent the following letter to PSKY, together with revised versions of the merger agreement and other transaction documentation:

Dear Members of the PSKY Board:

The Board of Directors of Warner Bros. Discovery (WBD) is fully committed to delivering a superior transaction to our shareholders. Since our decision last year to separate our Streaming & Studios businesses from our Global Linear Networks business, we have actively explored a wide range of alternatives, including through a publicly-announced strategic review process in which Paramount Skydance (PSKY) participated, having initially approached WBD in September 2025. Our agreed transaction with Netflix offers superior value for our shareholders, allows us to achieve our strategic goal to separate WBD's businesses, offers a high degree of certainty with minimal risk to the businesses in the interim and has essentially no financing risk. The WBD Board continues to unanimously recommend that our shareholders approve the Netflix transaction, as reflected in the definitive proxy statement we have filed with the SEC today.

On February 10, PSKY amended its tender offer for WBD common stock. While this amendment addresses some of the concerns that WBD had identified several months ago, it still contains many of the unfavorable terms and conditions that were in the draft agreements submitted by PSKY on December 4, 2025 and December 22, 2025 and twice unanimously rejected by our Board. PSKY indicated in its February 10 letter to the WBD Board a willingness to address some of those concerns, but does not do so in its proposed merger agreement, leaving WBD with vague assurances of intention. Other important issues raised several times with PSKY are unchanged from your prior submissions. On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY's best and final proposal.

We are writing to inform you that Netflix has agreed to provide WBD a waiver of certain terms of the Netflix merger agreement to permit us, through February 23, to engage with PSKY to clarify your proposal, which we understand will include a WBD per share price higher than $31. We seek your best and final proposal. To be clear, our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. We continue to recommend and remain fully committed to our transaction with Netflix and have scheduled a special meeting of our shareholders on March 20, 2026 to vote on the Netflix merger agreement.

As you know, it is typical and expected for a would-be overbidder to accept the substantive terms of the merger agreement that the target company has already agreed with its existing merger party. To provide you with specific clarity in this regard, we have prepared, and our legal counsel will deliver to you today, copies of transaction agreements that conform to this approach, address key issues for the WBD Board in prior PSKY offers and incorporate the terms and assurances reflected in your February 10 letter, as well as certain other changes to reflect matters unique to your proposal. Attached at the end of this letter is a business summary of these changes. As part of your binding proposal, the WBD Board needs confirmation that you are prepared to sign our proposed agreements. We encourage you to be direct and transparent with your best and final value and other terms in that binding proposal.

During this seven-day period – as we consistently did during the strategic review process last year – we welcome the opportunity to engage with you and expeditiously determine whether PSKY can deliver an actionable, binding proposal that provides superior value, transaction certainty and interim protection for WBD's businesses to Warner Bros. Discovery shareholders.

On behalf of the WBD Board of Directors,

Samuel A. Di Piazza, Jr.                                                       

Board Chair

David Zaslav

President and

Chief Executive Officer

Summary of Changes to Transaction Agreements

Below is a summary of the principal business changes reflected in the transaction agreements provided by WBD today, as compared to the draft agreements provided by PSKY in its tender offer. Many of these reflect terms proposed by PSKY in its public statements but not reflected in its merger agreement; others align the draft agreement with the terms of the Netflix merger agreement.

Refinancing and Junior Lien Notes: PSKY to bear expenses in connection with any junior notes liability management exercise when incurred, or pay the $1.5 billion financing fee to WBD at the time it would be due (December 30, 2026). The Netflix merger agreement does not require WBD to bear any cost in this regard.

Bridge Refinancing: PSKY's consent will not be required for WBD's bridge refinancing, which will consist of dollar and euro term loan debt and bonds on market terms available at the time of the refinancing. The bond component will have a tenor of no more than 7 years, and will be non-callable for no more than 3 years, and the loan component will be non-callable for no more than 1 year. This provision is substantially more favorable to PSKY than the terms of the Netflix Merger Agreement, which permit WBD full refinancing flexibility.

Material Adverse Effect: Consistent with the statement in PSKY's Feb. 10 letter that it is "prepared to address any concerns WBD has regarding the impact of Discovery Global's performance on closing certainty," the "Company Material Adverse Effect" definition excludes effects attributable to the performance of WBD's Global Linear Networks business (consistent with the Netflix Merger Agreement).

Equity Cure to Support Debt: The significant debt financing and resulting pro forma leverage in the PSKY offer create material closing uncertainty, particularly when compared to Netflix's investment grade credit rating and large positive free cash flow. PSKY has repeatedly stated that these concerns are not serious, noting the personal wealth of your lead equity sponsor and the credibility of your lending banks. To reflect your assurances, the draft agreements provide that in the event the transaction would not close due to the debt financing being unavailable, additional equity will be funded to enable closing to occur

Interim Operating Covenants: The interim operating covenants should not require consent from PSKY in order for WBD to operate its business in the ordinary course between signing and closing. The additional covenants you have proposed are not part of our agreement with Netflix, and are not accepted, as they further risk the certainty of closing.

Equity Financing Certainty: Our changes to the PSKY equity documents reflect the need for absolute clarity as to funding obligations and certainty of funding at closing, or to pay damages if due.

Equity Syndication: WBD will receive notice and full information regarding any equity syndication, and its consent will be required for any direct or indirect syndication that would require regulatory approvals or delay closing.

The WBD Board has not determined that PSKY's proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. There can be no assurance that a definitive transaction will result from WBD's discussions with PSKY. The WBD Board and management team remain resolute in their commitment to maximizing value for shareholders and continue to recommend shareholders vote FOR the merger with Netflix.

Warner Bros. Discovery Is Now Considering Sale To Paramount

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Warner Bros Discovery is considering reopening sale talks with rival Hollywood studio Paramount Skydance, after receiving its hostile suitor's most recent amended offer, Bloomberg News reported on Sunday, citing people with knowledge of the matter.

Members of Warner Bros' board are discussing whether Paramount could offer the path to a superior deal, the Bloomberg report said, adding that the board has not decided how to respond and may stick to the current deal with Netflix.

Paramount had enhanced its Warner Bros bid last week by offering shareholders extra cash for each quarter the deal fails to close after this year. It also agreed to cover the breakup fee the HBO parent would owe Netflix if it walked away, even though the CBS owner did not raise its per-share offer.

Paramount said it has offered shareholders a 25-cent-per-share quarterly "ticking fee" (about $650 million) in cash starting in 2027 until closing and agreed to cover Warner Bros’ $2.8 billion breakup fee to Netflix. However, it did not raise its $30-per-share offer, valuing the deal at $108.4 billion including debt.

Both Netflix and Paramount covet Warner Bros for its leading film and television studios, extensive content library and major franchises such as "Game of Thrones," "Harry Potter" and DC Comics superheroes Batman and Superman.

Activist investor Ancora Holdings, which has built a nearly $200 million stake, last week said it plans to oppose the Netflix deal, arguing the board did not sufficiently engage with Paramount over its rival bid, which includes cable assets like CNN and TNT.

Paramount Sweetens Offer For Warner Bros. Discovery

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Paramount has enhanced its offer for Warner Bros Discovery, not formally upping its $30-a-share cash bid but injecting a new $0.25-per-share so-called “ticking fee” payable to WBD shareholders for each quarter its transaction has not closed beyond December 31, 2026.

It said the move comes to about $650 million in cash value each quarter and underscores “Paramount’s confidence in the speed and certainty of regulatory approval for its transaction.” It also agreed to fund a $2.8 billion termination fee that would be payable to Netflix and ticked off a series of concessions around WBD’s debt financing costs and obligations.

Warner Bros Discovery has a deal to sell its studios and streaming assets to Netflix and advised shareholders several times to reject a hostile takeover offer from David Ellison‘s company, which is looking to acquire all of WBD. There’s a full-out PR battle raging as executives of all three court content creators, unions, Warner shareholders, politicians and regulators on both sides of the Atlantic. Netflix late last month upgraded its offer of $27.75 a share from cash-and-stock to all cash.

WBD has yet to set a date for a special meeting in April where shareholders will vote on the Netflix transaction. It’s been urging them to cast a yes vote. Paramount is aggressively lobbying them to vote no and, meanwhile, to tender their WBD shares to Paramount. The Ellisons have said they are planning to run an alternate slate of directors for election at WBD’s annual meeting, which comes later.

Both deals are expected to have long lead times to close. Netflix is not buying the cable assets and its agreement would see WBD spin off linear television into a separate public company called Discovery Global.

Paramount is ramping up the pressure with its announcement today. The $2.8 billion termination fee that would be due to Netflix if WBD switches sides has, for instance, has been an objection raised by the Warner board, which confirmed receipt of the amended offer. It will “carefully review and consider” it and issue a recommendation. Meanwhile, the board stressed that it still backs the Netflix deal and advised stockholders not to take any action on Paramount’s latest unsolicited offer.

Paramount’s other new commitments include eliminating WBD’s potential $1.5 billion financing cost by fully backstopping an exchange offer that relieves WBD of its contractual bondholder obligations. Par said it will fully reimburse WBD’s shareholders for the $1.5 billion fee without reducing a separate $5.8 billion termination fee. That’s the amount Paramount (and Netflix) have agreed to pay WBD if an acquisition fails to close.

Also, if WBD’s financing sources will not extend the maturity of WBD’s existing $15 billion bridge loan, Paramount said its own debt financing sources “are fully prepared to do so, with any incremental costs covered by Paramount. Alternatively, Paramount will permit WBD to structure permanent financing in any way it chooses so long as the debt is redeemable at a commercially reasonable cost.”

Paramount said it will provide WBD flexibility between signing and closing, including by matching any comparable Netflix interim operating covenants. It said it “is open to discussing with the WBD Board of Directors contractual solutions to account for the possibility of continuing deteriorating financial performance beyond what WBD is currently projecting for its linear network business.”

Paramount’s amended offer is now fully financed by an increased $43.6 billion of equity commitments from the Ellison family and RedBird Capital Partners and $54 billion of debt commitments from Bank of America, Citigroup and Apollo.

Financing includes “an irrevocable personal guarantee” from Oracle co-founder Larry Ellison of $43.3 billion covering the equity financing as well any damages claims against Paramount.

“While we have tried to be as constructive as possible in formulating these solutions, several of these items would benefit from collaborative discussion to finalize. If granted a short window of engagement, we will work with you to refine these solutions to ensure they address any and all of your concerns,” David Ellison wrote in a letter to the WBD board released publicly and in an SEC filing today.

Paramount claims the WBD board has consistently refused to engage with it over the course of multiple offers, which Warner has denied.

Paramount Is Exploring Potential Partnerships In Reviving MTV

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The Paramount CEO is keen to revive the once-iconic brand, and is talking to major companies and music industry figures about strategic partnerships, including an economic stake in MTV, per Bloomberg. Such a strategic deal could give it expanded access to music rights or artists.

When MTV launched 45 years ago, it debuted with a music video of The Buggles’ “Video Killed the Radio Star.”

It was a statement about the state of the music business, with MTV carving out a niche as the home for music on TV sets, and helping to create the music video format, which dominated its lineup (alongside other music-related programming) for the next few decades.

Now, of course, music videos are as popular than ever, but their home is YouTube (and to a lesser extent, TikTok, Instagram, Spotify, and Apple Music), while MTV shut down MTV News, and has more recently been a repository for aging reality TV shows like Jersey Shore, RuPaul’s Drag Race, Catfish and Ridiculousness.

With Paramount canceling Ridiculousness last year, the brand has been preparing for a wholesale reboot, and now we have a sense of what Ellison has in mind: Bringing back the music.

The music, of course, never left entirely. The MTV Video Music Awards remain one of the few cultural touchpoints for the music industry, and attracts the biggest stars in the business (even if the viewership has largely migrated to its simulcast on CBS, and Paramount+ on streaming).

But other than that, the music has mostly been silenced, and that appears poised to change. That is a big reason why, around New Year’s Eve, posts went viral on Instagram, TikTok, X and LinkedIn about MTV shutting down. It wasn’t (the company was just shutting down a few ancillary music-only channels in the U.K.), but the reaction from people underscored what everyone seems to realize: The brand’s best days were in its past.

Ellison seems to be heeding the call by Tom Freston, the legendary media executive who helped build MTV to be the powerhouse that it was at its peak.

Freston told The Hollywood Reporter in November that he had dinner with Ellison and some of his senior executives to discuss the brand.

“I had a meeting with David and Jeff Shell and a couple people,” Freston recalled. “They had a lovely dinner — me and [former colleagues] Judy McGrath and Doug Herzog and Jason Hirschhorn just before they made the purchase. It was due diligence on their part. They were like, ‘You guys were there in the golden age. We don’t know what’s happened?’ I said, ‘First of all, when they sawed the ‘music television’ off the bottom of the logo, they lost me.’ But all the music people had left and MTV didn’t have any real value as a music brand. I don’t know if you can resurrect it, but I think you might be able to.”

MTV the cable channel may or may not survive the entertainment business’ perilous transition to streaming, but MTV the brand has a shot.

“One, they have a huge library of shows. The Unpluggeds and some of the reality shows were pretty good,” Freston added. “They also have a huge library of music videos and MTV News — everything that happened from 1980 on. So, why couldn’t you do some kind of digital curation thing? Anyway, I’m really happy to see Ellison there. I mean, if someone was going to buy Paramount, the Ellisons got my vote.”

And bringing a music publisher like Warner Music Group or Universal into the fold, or perhaps even a streaming player like Spotify or Amazon Music, could help resurrect a cable brand that had seemingly been left for dead.

Executives at NBCUniversal frame Bravo as a brand that represents a particular type of lowbrow-highbrow reality TV, and that even if the channel vanished, the brand could live on. Paramount executives clearly think they can pull those same levers at the former MTV Networks cable channels.

But the exact strategy, and what partners might want to buy in, will determine that trajectory.

Warner Bros. Discovery Rejects Paramount's Latest Bid For The Company

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The WBD board branded Paramount’s hostile takeover offer as "inadequate" and risky.

Warner Bros rejected Paramount’s latest takeover bid on Wednesday, telling shareholders to stick with a rival offer from Netflix.

Warner’s leadership has repeatedly rebuffed Skydance-owned Paramount’s overtures — urging shareholders just weeks ago to back its the sale of its streaming and studio business to Netflix for $72bn (€61.62bn).

Paramount, meanwhile, has sweetened its $77.9bn (€66.67bn) offer for the entire company and gone straight to shareholders with a hostile bid.

Warner Bros Discovery said on Wednesday that its board determined Paramount’s offer is not in the best interests of the company or its shareholders.

“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed," Warner Bros Discovery chair Samuel Di Piazza Jr. said in a statement.

"Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”

Paramount did not immediately respond to a request for comment.

Late last month, Paramount announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison — father of Paramount CEO David Ellison — to back $40.4bn (€34.58bn) in equity financing for the company’s offer.

Paramount also increased its promised payout to shareholders to $5.8bn (€4.96bn) if the deal is blocked by regulators, matching what Netflix already put on the table.

In a letter to shareholders, Warner expressed concerns about a potential deal with Paramount. It said it essentially considers the offer a leveraged buyout, which includes a lot of debt, and that it could take 12 to 18 months to close a deal.

The battle for Warner and the value of each offer grows complicated because Netflix and Paramount want different things. Netflix’s proposed acquisition includes only Warner’s studio and streaming business, including its legacy TV and movie production arms and platforms like HBO Max. But Paramount wants the entire company — which, beyond studio and streaming, includes networks like CNN and Discovery.

If Netflix is successful, Warner’s news and cable operations would be spun off into their own company, under a previously-announced separation.

A merger with either company will attract tremendous antitrust scrutiny. Due to its size and potential impact, it will almost certainly trigger a review by the US Justice Department, which could sue to block the transaction or request changes. Other countries and regulators overseas may also challenge the merger.

Warner Bros. Discovery Rejects Paramount's $108 Billion Bid For The Company

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Warner Bros. Discovery still isn't interested in Paramount Skydance's offer.

Paramount's latest bid "is inadequate, with significant risks and costs imposed on our shareholders" compared to Netflix's bid, which "represents superior, more certain value for our shareholders," said Samuel Di Piazza, the chair of WBD's board of directors, in a statement to shareholders on Wednesday morning.

In a letter to shareholders, WBD's board recommended that shareholders reject Paramount's all-cash bid of $30 per share in favor of Netflix's cash-and-stock offer. Paramount wants to buy all of WBD, including its cable channels, while Netflix's bid of $27.75 per share is for WBD's studio, HBO, and HBO Max. A key difference between the two bids revolves around the value of WBD's TV networks, such as CNN and TNT, which Netflix isn't interested in buying.

Di Piazza said that Paramount's seventh proposal "once again fails to address key concerns that we have consistently communicated," including about Paramount's financing.

Paramount has said its bid is fully backstopped by Larry Ellison, one of the richest people in the world and father to Paramount CEO David Ellison. The WBD board said in the letter to shareholders that it relies "on an unknown and opaque revocable trust" whose assets or liabilities are subject to change.

Meanwhile, Netflix is paying with cash and stock. Its shares have fallen recently but surged more than 600% from mid-2022 to mid-2025. Netflix has a market cap of over $400 billion.

While Paramount has said that it would have an easier time securing regulatory approval than Netflix, the WBD board says it "does not believe there is a material difference in regulatory risk" between the two proposals.

The Ellisons are close to President Donald Trump. However, Netflix co-CEO Ted Sarandos has pitched the president on the deal and seems to have earned some respect. Trump has called Sarandos a "great person," though he added that the Netflix-Warner Bros. deal "could be a problem" on the regulatory front. Still, the president hasn't come out publicly in favor of one side in the deal.

WBD also said its board "repeatedly engaged" with interested parties, including the Ellisons. Paramount had previously said that WBD went quiet late in the bidding process.

Not even Paramount can be surprised by WBD's decision to stick with its Netflix deal.

David Ellison was overheard saying last week that if WBD's leadership were to "accept the offer exactly as it is today, right, then they're admitting breach of fiduciary duty," Business Insider previously reported.

That's because Paramount said its $30-per-share hostile bid was nearly identical to its previous offer to WBD. Public companies are obligated to act in the best interests of shareholders. So if WBD's board had changed its mind, it could have opened itself up to shareholder lawsuits.

WBD had said in a statement after Paramount's hostile bid that it would "carefully review and consider Paramount Skydance's offer" in a way that was "consistent with its fiduciary duties and in consultation with its independent financial and legal advisors."

Now that WBD's board has given Paramount the cold shoulder again, it's Ellison's move.

The aspiring media mogul told CEO David Zaslav that Paramount's latest offer wasn't its "best and final," which suggests that a higher bid could be coming. Just how much appetite Paramount has to escalate the bidding war is the key question.

If no higher bid comes, WBD's investors have until January 8 to back Paramount, though it could extend that deadline. WBD would owe Netflix a $2.8 billion reverse breakup fee if its shareholders chose Paramount.

Read the full letter to shareholders here:

Dear Fellow Shareholders,

As your Board of Directors, we are committed to acting in your best interest. In this spirit, in October, we launched a public review of strategic alternatives to maximize shareholder value. This followed three separate proposals from Paramount Skydance ("PSKY"), as well as interest from multiple other parties.

That thorough process, overseen by the Board with the assistance of independent financial and legal advisors, as well as our management team, led to the company entering into a merger agreement with Netflix on December 4, with the substantial benefits to WBD shareholders described below. Having failed to submit the best proposal for you, our shareholders, PSKY launched an offer nearly identical to its most recently rejected proposal.

As a Board, we have now conducted another review and determined that PSKY's tender offer remains inferior to the Netflix merger. The Board continues to unanimously recommend the Netflix merger, and that you reject the PSKY offer and not tender your shares.

Below, and in more detail in our 14D-9 filing, we highlight the many reasons for the Board's determination. None of these reasons will be a surprise to PSKY given our clear, and oft-repeated, feedback on their six prior proposals.

The terms of the Netflix merger are superior. The PSKY offer provides inadequate value and imposes numerous, significant risks and costs on WBD.

The value we have secured for shareholders through the Netflix merger is extraordinary by any measure.

Our agreement with Netflix gives WBD shareholders $23.25 in cash, plus $4.50 in shares of Netflix common stock (based on a collar range of $97.91 - $119.67 in the Netflix stock price at the time of closing), plus the additional value of the shares of Discovery Global and the opportunity to participate in future potential upside following Discovery Global's separation from WBD. The entire Board is confident in our recommendation that Netflix represents the best value-creating path for shareholders.

PSKY has consistently misled WBD shareholders that its proposed transaction has a "full backstop" from the Ellison family. It does not, and never has.

PSKY's most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind. Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding. Despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was — and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming — the Ellison family has chosen not to backstop the PSKY offer.

And a revocable trust is no replacement for a secured commitment by a controlling stockholder. The assets and liabilities of the trust are not publicly disclosed and are subject to change. As the name indicates, revocable trusts typically have provisions allowing for assets to be moved at any time. And the documents provided by PSKY for this conditional commitment contain gaps, loopholes and limitations that put you, our shareholders, and our company at risk.

Amplifying the concerns about the credibility of the equity commitment being offered by PSKY, the revocable trust and PSKY have agreed that the trust's liability for damages, even in the case of a willful breach, would be capped at 7% of its commitment ($2.8 billion on a $108.4 billion transaction). Of course, the damage to WBD and its stockholders were the trust or PSKY to breach their obligations to close a transaction would likely be many multiples of this amount.

WBD's merger agreement with Netflix is a binding agreement with enforceable commitments, with no need for any equity financing and robust debt commitments. The Netflix merger is fully backed by a public company with a market cap in excess of $400 billion with an investment grade balance sheet. The debt financing for the PSKY bid relies on an unsecure revocable trust commitment as well as the credit worthiness of a $15 billion market cap company with a credit rating at or only a notch above "junk" status from the two leading rating agencies. The financial condition and creditworthiness of PSKY, which, if its proposed transaction were to close, would have a high gross leverage ratio of 6.8x 2026E debt to EBITDA with virtually no current free cash flow generation before synergies, raise substantial risks for its acquisition of WBD. Such debt levels reflect a risky capital structure that is vulnerable to even potentially small changes in the PSKY or WBD business between signing and closing.

Additionally, PSKY contemplates $9 billion in synergies from the mergers of Paramount/Skydance and their offer for WBD. These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger.

The Board's review was full, transparent and comprehensive — establishing a level playing field that fostered a rigorous and fair process.

The Board repeatedly engaged with all parties, including extensive engagement with PSKY and its advisors over the course of nearly three months. We held dozens of calls and meetings with its principals and advisors including four in-person meetings and meals between David Zaslav and David and/or Larry Ellison and provided multiple opportunities for PSKY to offer a proposal that was superior to those of the other bidders, which PSKY never did.

After each bid, we informed PSKY of the material deficiencies and offered potential solutions. Despite this feedback, PSKY has never submitted a proposal that is superior to the Netflix merger agreement.

Despite PSKY's media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger.

The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors. The Board believes that each transaction is capable of obtaining the necessary U.S. and foreign regulatory approvals and that any difference between the respective regulatory risk levels is not material. The Board also notes that Netflix has agreed to a record-setting regulatory termination cash fee of $5.8 billion, significantly higher than PSKY's $5 billion break fee.

The PSKY offer is illusory.

The offer can be terminated or amended by PSKY at any time prior to its completion; it is not the same thing as a binding merger agreement. The first paragraph of the offer states it is "subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time)" and continues on the next page, "we reserve the right to amend the Offer in any respect (including amending the Offer Price)". In addition, the offer is not capable of being completed by its current expiration date, due to the need for, among other things, global regulatory approvals, which PSKY indicates may take 12-18 months. Nothing in this structure offers WBD shareholders any deal certainty.

The PSKY offer provides an untenable degree of risk and potential downside for WBD shareholders.

There will be additional costs associated with PSKY's offer that could impact shareholders.

When considering the PSKY offer at this juncture, it is important to note that its acceptance could incur significant additional costs to shareholders — all of which PSKY has ignored in their communications. WBD would have to pay Netflix a $2.8 billion termination fee, which PSKY has not offered to reimburse. In addition, WBD would incur approximately $1.5 billion in financing costs if we do not complete our planned debt exchange as agreed to with certain of our debtholders, which would not be permitted by the PSKY offer. This additional $4.3 billion in potential costs represents approximately $1.66 per share to be borne by WBD shareholders if the offer does not close.

We look forward to moving ahead with our combination with Netflix and delivering the compelling and certain value it will create for shareholders. We urge you to carefully read the 14D-9 filed with the SEC this morning and available on our website, which more fully details the strategic review process and the Board's reasons for its recommendation to you.

Sincerely,

The Warner Bros. Discovery Board of Directors

Would Paramount Be A Good Suitor For Warner Bros. Discovery Global?

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Paramount is planning to several linear channels across the world by the end of 2025. This includes Nickelodeon's channels in New Zealand and Brazil, BET in France and MTV's music channels across Europe.

Amidst this, Paramount is currently in pursuit of Warner Bros. Discovery which distributes brands like Discovery Channel, HGTV, Cartoon Network and CNN. Prior to this bid, Warner Bros. Discovery was exploring potential split with most of their cable networks forming part of Discovery Global.

If we analyze most of the channels Paramount is looking to shutter across the world such as BET in France and Nickelodeon in Brazil. You would discover that most of the hits target regional or localised brands which does lead us to wonder what is to become of Discovery Global.

Discovery Global offers a lot of cable networks compared to Paramount the ones which have seen success internationally include Cartoonito, Boing and DMAX. These would expand to include regional networks like Discovery Family, Real Time and TNT.

In the event where Paramount bid is probably deemed successful whose to guarantee that these networks won't walk out the door. Paramount is pivoting toward streaming and wanting to offer content with global appeal.

If you look at the state of Paramount's cable networks their operations would be reduced to just MTV, Comedy Central, Nickelodeon, Nick Jr. and Nicktoons by next year. As BET, MTV Base and various other channels get their affairs in order and bid farewell.

There's a chance Cartoon Network and Nickelodeon could be placed under the same umbrella although Paramount intends to keep certain aspects of Warner Bros. Discovery. Reductions is the one thing that usually comes out of a merger or acquisition.

Paramount intends to merge HBO Max with Paramount+ and that wouldn't necessarily equal more content. HBO Max in such a transaction could become what Hulu is on Disney+ globally as opposed to a juggernaut like Netflix.

Paramount very much like Warner can see the writing on the wall when it comes to dominance and the reality is that not everyone can be a shark under water. Some companies to resort to partnerships or even mergers to become a bigger fish in the ocean.

Usually in merger and acquisitions, the acquiring company puts their needs above all else. In the first round, it would be Nickelodeon, Nicktoons, Nick Jr., from Paramount going up against Cartoon Network and Cartoonito from Warner Bros. Discovery.

Warner Bros. Discovery had been reliant on third party content for these cable networks and Paramount may not like that strategy. Aside from that, Cartoon Network makes 15%-20% of its revenue from 2014 which has affected the channel's overall performance.

Teen Titans GO! is currently the only primetime show on the network while other productions like Tiny Toons Looniversity and We Baby Bears wrap productions. Then there's Batwheels on Cartoonito which has been on limbo following its third season renewal.

Paramount in its attempts at scaling back on costs could opt to merge Cartoon Network's operations with that of Nickelodeon or Nicktoons while Cartoonito is phased out in favour of Nick Jr.

The second round would comprise of Travel Channel, Discovery Family, Real Time and TNT.

As seen already, Paramount is scaling back on its international operations with the closures of CBS Reality, CBS Justice, MTV Base and BET. Whose to say that the same fate won't await these brands.

Discovery Channel and TLC have more reruns and part of their primetime shows are likely reruns from HGTV and Food Network. It kind of makes Discovery Family and Real Time obsolete if the company doesn't have much content for their core brands.

Travel Channel is very similar to BET and CBS Reality when it comes to scale with the channel that had also seen a slow decline in carriage. Under Paramount, this endeavours would be accelerated even further.

Paramount Looking To Increase Its Bid For Warner Bros. Discovery To $71 Billion

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David Ellison’s Paramount Skydance is said to be turning to new partners in the Middle East to help back his offer to acquire Warner Bros. Discovery in its entirety.

Paramount Skydance has formed an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a bid for Warner Bros. Discovery, sources told Variety. The bid is being largely backed by the Ellison family (which owns 100% voting control in Paramount Skydance) with involvement from three Arab countries: Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA), the sources said. In addition, Gerry Cardinale’s RedBird Capital is backing the bid.

Each of the funds would put up $7 billion (for a total of $21 billion); Paramount Skydance would front $50 billion for a proposed WBD acquisition for a total of $71 billion. (It’s not clear if that price tag would be inclusive of debt.) The board of Warner Bros. Discovery had previously rejected a $23.50/share offer from David Ellison.

The board of Warner Bros. Discovery has set a Nov. 20 deadline for initial bids from interested acquirers, which also include Comcast and Netflix.

Separately Tuesday, Saudi Crown Prince Mohammed bin Salman was meeting at the White House with President Trump.

Meanwhile, Comcast co-CEO Brian Roberts traveled to Saudi Arabia in late October to attend a conference in Riyadh hosted by the PIF, Variety has confirmed. He also visited Qiddiya, where the country is building a theme park destination, to scope out the area for a possible Universal park in the area. But it’s not known whether Roberts solicited investment backing from the Saudis for a Warner Bros. bid by Comcast.

Reps for Paramount Skydance, Warner Bros. Discovery and Comcast declined to comment.

Under the scenario in the WBD bid led by Paramount Skydance, the Saudi, Qatar and Abu Dhabi funds would hold small minority stakes in Warner Bros. Discovery. Each of the three would get “an IP, a movie premiere, a movie shoot,” a knowledgeable source told Variety. “All they care about is reputation and soft power,” the source added.

The Saudis do not have “any incentive” to join a prospective Comcast bid for Warner Bros. (excluding WBD’s linear TV networks) because their understanding is that “the Trump administration doesn’t like Comcast CEO Brian Roberts at all,” the source said.

Trump, who has regularly been upset about the coverage of Comcast-owned MSNBC (which is now called MS NOW), earlier this year called Roberts the “chairman of ‘Concast’” and a “lowlife.” Trump has equated the cable news outlet to “an illegal arm of the Democrat Party,” and claimed that Comcast “should be forced to pay vast sums of money for the damage they’ve done to our Country.”

Sky New Zealand Launches Two New Channels To Replace Paramount's Offering And Cartoon Network

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Sky New Zealand is launching two new self-branded channels to replace Paramount’s Nickelodeon, Nick Jr, Comedy Central and Cartoon Network, which are ceasing transmission from early December.

The new offerings, Sky Comedy and Sky Kids, will carry programming from the expiring channels in addition to new shows from a range of studios and locally commissioned content.

“Kids and comedy programming are at the heart of Sky’s entertainment offering. By bringing these important channels ‘in-house’ we can choose and curate the content that we know our customers enjoy and engage with, combining Paramount fan favourites with content from other studios,” said Fiona Murray, Sky NZ’s head of entertainment.

Sky Comedy will feature Comedy Central content including the final season of The Late Show with Stephen Colbert, South Park, The Daily Show and Beavis & Butt-Head, in addition to retro classics including Cheers, Reno 911!, Nathan For You and Key & Peele.

Sky Kids is being pitched as offering educational programming for preschoolers through to primary school-age children. Former Nickelodeon and Nick Jr content will be included alongside “a strong slate of local programming.”

The new outlet will complement the existing CBeebies channel, providing local content including Katie’s Kuri and The Last Moa, as well as multiple seasons of home-grown hits such as Kiri & Lou, The Drawing Show, Extreme Cake Sports and Secrets at Red Rocks.

Sky NZ said some content from the axed channels will continue to be available via on-demand on the new Sky Experience service across the Sky Box and Sky Pod platforms. Cartoon Network content will continue to be available on-demand through the HBO Max hub via the Sky Entertainment package.

The broadcaster has also partnered with Mood TV to bring two new local music channels to its channel line-up, Juice TV and J2, which effectively replace MTV Hits and MTV 80s. In line with the global shutdown of the MTV brand, the music channels will no longer be available via linear in New Zealand.

In October, it was announced that MTV linear channels would progressively shut down in the UK, Poland, France and Brazil. In Australia, the MTV brand has suffered a similar fate, with its channels having been shut down weeks ago by OTT provider Fetch TV. Paramount owned Australian channels MTV 80s, MTV 90s, MTV 00s, MTV Club and MTV Hits which were previously carried by Foxtel in a deal that was not renewed.

All changes to Sky NZ programming take effect from December 2.

The FCC Approves Paramount And Skydance's Merger Attempt

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The Federal Communications Commission has cleared the way for Paramount Global to complete its merger with Skydance Media, announcing Thursday that it has approved the deal. The decision removes a final hurdle for the media and entertainment companies to close their transaction.

The FCC's approval, which was necessary for the deal to move forward, caps a long-running corporate saga over the fate of Paramount, which owns Paramount+, the Paramount Pictures movie and television studios, the CBS television network and CBS News and Stations. Paramount also owns Nickelodeon, BET, MTV, Comedy Central and other media brands. 

Paramount Global agreed to merge with David Ellison's Skydance Media in July 2024 after briefly halting negotiations the month before. The deal followed a long, turbulent sales process that drew interest from other major corporate players and investors, including Seagram heir Edgar Bronfman Jr., media mogul Barry Diller, Sony Pictures and private equity firm Apollo Global Management, and Allen Media, the company controlled by former comedian Byron Allen. 

Paramount had said it expected to close the $8.4 billion merger in the first half of 2025. But the first half of the year came and went, and the merger remained under review by the FCC and its chair Brendan Carr, who had been appointed to the role earlier this year by President Trump.

Late on July 1, Paramount announced it had settled a lawsuit with Mr. Trump over the editing of a "60 Minutes" interview with Kamala Harris, a suit that Paramount told the court was without merit. The company agreed to pay $16 million — most of which would go to Mr. Trump's presidential library — and agreed to publish transcripts of future "60 Minutes" interviews with presidential candidates after those interviews air on the show. Mr. Trump has since said he expects Paramount's new owners to offer him about $20 million in advertising and PSAs. Paramount said in a statement it had no knowledge of any commitments to Mr. Trump outside of its $16 million settlement, and Skydance didn't respond to requests for comment.

In two letters to the FCC earlier this week, Skydance pledged to hire a CBS News ombudsman to review complaints of editorial bias for a period of at least two years, and the company confirmed that Paramount had eliminated or modified its DEI programs and hiring practices earlier this year.

Paramount Global Looking To Shutter Both BET And MTV Base Africa In Major Restructure

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Paramount Global‘s Africa offices may close, local channels may be shuttered, and staffers’ roles could be impacted, company executives told employees in the region on Tuesday.

The company has been prioritizing investments in its growing streaming business and core global content as it navigates shifts in audience behavior and the macro-economic environment. As part of that, it is reviewing its international pay TV strategy and considering adjustments to its linear channel portfolio in international markets, with a focus on cable brands. Management has also signaled a focus on businesses and regions with the most opportunity for revenue growth.

Tuesday’s news comes as Paramount continues to wait for FCC approval of Skydance Media’s deal to acquire it. THR understands that Paramount has fewer than 100 employees in Africa between its offices in Johannesburg, South Africa and Lagos, Nigeria.

“We are at a point in our journey where we are facing immense industry disruption,” Monde Twala and Craig Paterson, co-general managers of Paramount Africa, said in a staff memo obtained by THR. “Our team is not immune to potential changes as our organization evaluates its pay TV strategy and local channel footprint here in Africa.”

In June, Paramount unveiled further U.S. workforce cuts to the tune of 3.5 percent, following a 15 percent reduction last year. As of the end of 2024, Paramount Global had 18,600 employees worldwide. Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins said in a June memo that the focus was on U.S. headcount but the moves “may also result in some impacts to our workforce outside the U.S. over time.”

Twala and Paterson acknowledged in their staff memo: “Today was incredibly difficult. We want you to know your greatness is seen. We reach out with a heavy heart, but also with immense pride. Your dedication to excellence, creativity and passion for leveraging the power of our content have been the driving force behind our many accomplishments.”

They concluded: “We understand the coming weeks may be tough and feel unsettling. Through it all, please know your efforts are valued beyond measure.”

NFL Is In Talks To Acquire Some Of Skydance's Assets Ahead Of Merger With Paramount Global

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The National Football League is in talks with David Ellison’s Skydance Media and one of his major investors, RedBird Capital Partners, that could result in some of the league’s media assets changing hands, according to people familiar with the conversations.

The talks could include a sale of NFL Media and its NFL Network cable channel, or an acquisition by Paramount Global of the league’s interest in Skydance Sports, a joint venture that produces movies and TV shows, according to the people, who asked to not be identified because the discussions are private.

Paramount, which holds rights to broadcast NFL games, is in the process of merging with Skydance, an independent film and TV studio, in a deal expected to close next year. Paramount’s contract with the league includes a change of control provision that could allow the NFL to seek another media partner, the people said. The NFL’s deal with Paramount’s CBS network is worth about $2.1 billion a year through 2033.

Although it is unlikely that the NFL will seek to replace CBS as its broadcast partner, the provision has prompted a wider conversation about business opportunities between the league, Skydance and RedBird. The league is already in business with both parties and Commissioner Roger Goodell has praised Skydance in interviews.

In 2022, the NFL invested $45 million in Skydance Sports in a deal that valued the entity at about $100 million. Skydance and NFL Films produced a new season of HBO’s Hard Knocks documentary series, focusing on the New York Giants, this year. The two companies are also working on a 10-part documentary series on Dallas Cowboys owner Jerry Jones.

The league and RedBird are partners in EverPass Media, which distributes the NFL Sunday Ticket games to bars and restaurants. RedBird is also an owner of the United Football League, which plays in the spring season. Larry Ellison, the father of the Skydance founder and one of the world’s richest men, has previously expressed interest in owning a professional football team.

The NFL has been shopping its media assets for a few years. NFL Media includes the league’s digital operations, the NFL cable network, the film unit and NFL RedZone, a subscription service. Walt Disney Co.’s ESPN sports division had been in talks about a potential deal that could have seen the company acquire NFL Media, giving the league a stake in ESPN in return. Those talks have stalled, however.

Paramount Television Studios Is Closing Down As Part Of Cost Cutting Procedure With Content Set To Merge With CBS Studios

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PTVS’ shutdown will result in the exit of 20-30 employees. All current PTVS series and development projects will be folded into CBS Studios.

“To be clear, this is not a decision based on how PTVS performed. This move is the result of significant changes in the TV and streaming marketplace and the need to streamline our company,” Cheeks said. “Under Nicole’s leadership, this studio consistently punched above its weight in attracting top storytellers and stars to create best-in-class series. I want to thank every PTVS employee for shepherding a slate of shows that helped usher Paramount into the streaming era.”

Headed into the current wave of layoffs that will impact 15% of Paramount Global’s U.S. workforce over the next few months for $500M in savings, there had been chatter about Paramount TV Studios as a potential casualty following a string of downsizing/consolidation moves since CBS Studios and Paramount TV Studios were put together under Cheeks’ purview in the fall of 2022.

Both Cheeks and Clemens tried to assuage fears at the time by assuring PTVS staff that the division would remain independent from the larger CBS Studios as the two combined support operations by centralizing finance, law, production and casting. The same year, Paramount TV Studios absorbed Paramount+’s scripted originals team. (Word is more P+ layoffs may be coming after Labor Day.)

In the most recent round of layoffs in February, PTVS consolidated development and current under Head of Development Jana Helman, with a slew of senior programming executives leaving. It also dissolved/downsized communications, marketing and post-production which are now handled by CBS Studios. Prior to that, Clemens, a well-liked veteran executive, revealed that the studio was no longer going to produce limited series except for third-party buyers.

Also possibly factoring into the decision to shut down PTVS is Paramount Global’s pending merger with Skydance whose television division is very similar in scope and output to PTVS. The two companies have collaborated on such series as Reacher, Tom Clancy’s Jack Ryan and the upcoming Cross.

Other notable series produced by PTVS over the years include 13 Reasons Why, The Alienist, Station Eleven, Time Bandits, and The Spiderwick Chronicles.

Speculation about CBS Studios and Paramount TV Studios combining has actually been around since the 2019 CBS-Viacom merger was announced. Launched by Paramount Pictures’ Brad Grey in 2013, Paramount TV Studios has been the smaller of the two and its volume was impacted when Paramount+ pared down its scripted originals ramp-up plans to stem streaming losses. The studio continued to sell to outside platforms.

In her note to staff, Clemens, who joined PTVS in 2018, reflected on the label’s legacy.

“Over the past 11 years, PTVS has weathered seemingly insurmountable obstacles through a combination of strength, determination, and unwavering commitment,” she said. “We met these challenges with incredible resilience, creativity, and passion for what we do, and I could not be prouder of our team. We’ve also had the privilege to collaborate with some of the most brilliant creative talent in the industry to help tell incredible stories seen around the world, entertaining and shaping culture.”

Here are the two memos:

Note from Nicole Clemens: President, Paramount Television Studios

Dear PTVS Family,

As you’re all aware, Paramount Global has made the difficult decision to close Paramount Television Studios as part of the company’s broader restructuring plans. This has been a challenging and transformative time for the entire industry, and sadly, our studio is not immune.

Over the past 11 years, PTVS has weathered seemingly insurmountable obstacles through a combination of strength, determination, and unwavering commitment. We met these challenges with incredible resilience, creativity, and passion for what we do, and I could not be prouder of our team. We’ve also had the privilege to collaborate with some of the most brilliant creative talent in the industry to help tell incredible stories seen around the world, entertaining and shaping culture.

Although Paramount Television Studios is ending, our ethos will live on in shows that will continue to be enjoyed by global audiences for years to come. We’ve cemented our legacy by shepherding some of the most influential, award-winning, and critically acclaimed shows in the streaming era with series like “13 Reasons Why,” “The Offer,” “Defending Jacob,” “The Alienist,” “The Haunting of Hill House,” “Station Eleven,” “Time Bandits,” and many more. We have broken streaming platform records with “Tom Clancy’s Jack Ryan,” “Reacher,” and “The Spiderwick Chronicles.” Our upcoming shows, “Cross,” “Before,” and “Murderbot,” are sure to join the ranks of those hits.

This has been the most formative chapter in my career, and that is mainly due to the remarkable colleagues I have had the honor to lead and learn from on a daily basis. Thank you for supporting me, inspiring me, and laughing with me for the last six years — I wouldn’t have wanted to be in the trenches with anyone else.

I want to thank George Cheeks for his leadership and support through it all. There will undoubtedly be some tears as we move on, but this business is a marathon, and I am certain that we will cross paths, if not work together, again.

“Often when you think you’re at the end of something, you’re at the beginning of something else.” – Fred Rogers

With heartfelt gratitude,

Nicole

Note from George Cheeks: Co-CEO, Paramount Global and President & CEO, CBS

CBS Team,

As you saw from the email Brian, Chris and I sent earlier, this is a very difficult day at Paramount Global. I’m reaching out to share that today’s news unfortunately impacts CBS, including one of our studios.

A short time ago, we informed the team at Paramount Television Studios (PTVS) that the studio will cease operations at the end of the week. To be clear, this is not a decision based on how PTVS performed. This move is the result of significant changes in the TV and streaming marketplace and the need to streamline our company.

I want to thank PTVS President Nicole Clemens and the talented team she built for the many signature hits they produced. Under Nicole’s leadership, this studio consistently punched above its weight in attracting top storytellers and stars to create best-in-class series. I want to thank every PTVS employee for shepherding a slate of shows that helped usher Paramount into the streaming era.

Going forward, all current PTVS series and development projects will transition to CBS Studios.

In addition to PTVS, there are members of CBS teams who will be leaving the company. These are valued colleagues we admire and respect, whose talents contributed to the leadership position we enjoy today. I want to express my deepest gratitude for their contributions, hard work and dedication.

As we move forward, please keep these co-workers in your thoughts as our HR teams and their teammates help support them through this process.

There is a lot of news to unpack today. I know it’s unsettling. I continue to be impressed and grateful for our teams’ ability to stay focused and stick together during this transitional time.

George

Paramount And Skydance Merger Facing A Class Action Lawsuit By A Shareholder

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The suit, which was filed in Delaware court by Class B common stockholder Scott Baker, broadly alleges that controlling shareholder Shari Redstone forced through an “unfair” deal that benefits her and Paramount’s parent company National Amusements Inc (NAI) at the expense of Class B shareholders, who had no say in the deal.

The suit argues Redstone was intent on selling her interest in Paramount to Skydance “regardless of its impact on other Paramount shareholders.”

Through a unique ownership structure, the Redstone family’s holding company NAI owns 77% of the voting shares in Paramount, though it only holds a roughly 10% equity stake.

Under the proposed deal, Paramount’s Class B stockholders can cash out their shares at US$15. However, the suit alleges there isn’t enough money in the deal to buy out all of the non-NAI Class B shares. Instead, argues the suit, shareholders would get a mix of cash and Class B stock in the merged entity amounting to only US$12.23 per Class B shares.

The suit also alleges that Paramount’s board is “packed with Redstone insiders, over whom she exercises control,” and that Redstone has a history of controlling company boards and ousting directors in order to bring merger deals to fruition.

On the latter point, it cited the 2019 CBS-Viacom merger as an example of Redstone doing “everything in her power” to force a deal through, “even if it took her a couple of years and required ousting directors, packing boards of both merging companies with directors who would support her, and using NAI’s status as controlling shareholder to get what she wanted.”

In addition to Redstone, Paramount and NAI, the lawsuit also names Paramount board members Barbara Byrne, Linda Griego, Judith McHale, Charles Phillips and Susan Schuman as defendants, in addition to Skydance and its CEO David Ellison.

The filing of the lawsuit comes three weeks after Paramount and Skydance announced they had come to terms on a deal to form New Paramount following a lengthy negotiation process that saw several other bidders in the picture. The companies said they expect the transaction to close in the first half of 2025.

Through the deal, Skydance, which is backed by private equity firms RedBird Capital and KKR, will invest around US$2.4bn to acquire Paramount Global’s parent company, National Amusements, for cash and US$4.5bn for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares. It will also invest US$1.5bn to help improve Paramount’s balance sheet.

Ellison will serve as chairman and CEO of New Paramount, while Jeff Shell, the former NBCUniversal CEO who is currently chairman of sports and media at RedBird Capital, has been named president. Those appointments will become effective when the transaction closes.

The deal also includes a 45-day ‘go shop’ period, which allows Paramount to look for better offers before going with Skydance. However, going with another company would mean Paramount would have to pay Skydance a US$400m “breakup fee.” On Friday, billionaire Barry Diller, who emerged as a potential suitor last month, indicated that his company IAC was likely out of the running.

It had been widely assumed that the Paramount-Skydance deal would draw shareholder scrutiny and lawsuits, and there are expected to be several others filed in the coming months.

Paramount Global And Skydance Merger Will Shed $2 Billion In Cost Cutting Measures

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Paramount Global parent National Amusements and Skydance Media have agreed to merge less than a month after the sides abruptly ended deal talks.

Paramount, owner of Paramount Pictures movie and television studios, the CBS television network and CBS News, announced in a news release late Sunday that it is combining with Skydance, an entertainment business founded by David Ellison, son of Oracle founder Larry Ellison. Paramount also owns the Paramount+ streaming service, Nickelodeon, BET, MTV, Comedy Central and other media brands. 

The transaction resolves months of speculation around the future of Paramount, which also reportedly attracted a $26 billion bid from a consortium including Sony Pictures and private equity firm Apollo Global Management. A range of prominent media and entertainment industry executives were also said to have expressed interest in a possible deal for Paramount.

Under the two-step deal, Skydance will first pay $2.4 billion for National Amusements, which controls 77% of the voting shares of Paramount. Shareholders with non-voting stock will receive $15 per share, or one share of non-voting stock in the new company. 

Class A shareholders other than National Amusements will receive $23 per share, or the right to get 1.5333 non-voting shares in the merged company. Paramount Global would then merge with Skydance in an all-stock transaction that values the latter at $4.75 billion.

The deal also gives other potential bidders for Paramount 45 days to submit a competing offer, an apparent effort to appease shareholders who felt Skydance's initial bid undervalued their stake in the media company. The transaction is subject to regulatory approval. 

Uniting old and new Hollywood

The deal unites Paramount — a storied movie studio dating back to 1912 that is known for film classics such as "Titanic," "The Godfather" and "Raiders of the Lost Ark," as well as franchises including "Star Trek" and "Mission Impossible" — with a relative newcomer to the entertainment industry. Since David Ellison launched Skydance in 2010, the company has produced or co-produced hit films and TV shows including "Top Gun: Maverick" and the "Reacher" streaming series. 

"This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy," Ellison said in a statement. "I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come."

Ellison will serve as chairman and CEO of Paramount, and Jeff Shell, chairman of RedBird Sports and Media, a unit of investment firm RedBird Capital Partners, will become president. Shell is the former CEO of NBCUniversal.

Redstone's final act

For Shari Redstone, the controlling shareholder in National Amusements, the deal brings to a close her family's long stewardship of Paramount, which was built on the foundation laid by her late father, entertainment mogul Sumner Redstone. In recent years, that effort has focused on growing Paramount's streaming footprint, along with the continued expansion of its core network TV, cable and movie businesses. 

"In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global," Redstone said in a statement. "He had a vision that 'content was king' and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount's success and our accomplishments are a direct result of the incredibly talented, creative and dedicated individuals who work at the company. Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king."

The merger with Skydance follows what has been a fraught negotiation in which Paramount executives sought to balance the interests of investors who own the company's voting shares — which are primarily controlled by Redstone — and investors with non-voting stock. The latter are represented by large institutional investors such as Berkshire Hathaway and Vanguard, according to financial data firm FactSet.

The deal also follows the April 29 departure of former Paramount Global CEO Bob Bakish, who was replaced by an Office of the CEO led by three division chiefs: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime and MTV Entertainment Studios; and Brian Robbins, president and CEO of Paramount Pictures and Nickelodeon.

After the initial deal to combine National Amusements and Skydance collapsed on June 11, Paramount's new leadership disclosed plans to cut costs by $500 million, explore a joint venture or other possible partnerships for Paramount+, and sell non-core assets. It is uncertain how that blueprint could change under Skydance's watch. 

In a call with Wall Street analysts on Monday to discuss Paramount's future, Shell said RedBird and Skydance had identified roughly $2 billion in potential cost savings.

In its most recent quarter, Paramount reported an operating loss of $417 million on revenue of $7.6 billion, compared with a loss of $1.2 billion on revenue of $7.2 billion in the year-ago period. Skydance, which is privately held, expects its annual revenue to reach $1 billion in 2024, according to The Wall Street Journal. 

The sale of Paramount also highlights ongoing consolidation within the media space as industry stalwarts like Paramount and CBS seek to compete with much larger competitors, including technology and entertainment companies. 

Skydance Media Gets Board Committee Approval For Control Of Paramount Global After Lengthy Chase

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David Ellison‘s Skydance Media has gained a key approval vote for the company’s proposed acquisition of Paramount Global controlling shareholder National Amusements Inc. after seven months of talks.

The deal was blessed Sunday by a special committee of Paramount’s board of directors, a person familiar with the matter told Deadline. A formal announcement is expected as soon as Monday morning.

Bloomberg News earlier Sunday was the first to report on the special committee vote.

While the board committee action is a milestone, one of the features of the current agreement is a 45-day “go-shop” provision, which allows NAI chief Shari Redstone to field alternative offers. Apollo Global Management, Barry Diller and Edgar Bronfman Jr. are among those who have explored bids. Apollo, both on its own and in partnership with Sony Pictures, has submitted formal offers in recent months but they haven’t gained much traction.

Under terms of the Skydance agreement, Redstone and her family will receive $1.75 billion, with additional funds going toward Paramount debt repayment. The transaction is expected to be the first of two parts, with a full merger between Skydance and Paramount Global to follow. NAI controls nearly 80% of Paramount’s Class A, or voting, shares. It holds only about 10% of its equity value, with that disparity adding to the complexity of deal negotiations in recent months.

Skydance is a longtime partner with Paramount Pictures as a co-financier on marquee franchises like Mission: Impossible, Star Trek, Transformers and Top Gun. Along with the 112-year-old movie studio, Skydance will gain control of a portfolio including CBS, Nickelodeon and Paramount+. Unlike other bidders aiming to break up the company, Skydance is seen as wanting to preserve the entity in much the same shape as it currently exists, though there will undoubtedly be significant cost cutting. That strategic vision helps explain Redstone’s longtime preference for Skydance over some other suitors, according to sources familiar with the deal talks.

Less than a month ago, it seemed that any hope of the parties reaching a deal had evaporated. Redstone pulled out of a planned deal at the 11th hour over concerns regarding her net proceeds and exposure to shareholder lawsuits. While earlier Skydance overtures caused Paramount’s already battered stock to sink even lower due to concerns about shareholder dilution, the most recent go-round has boosted the share price. In Hollywood and media circles, the Paramount M&A watch has punctuated a period marked by existential anxiety and fears emerged of another major studio poised to disappear in the wake of Fox’s absorption by Disney.

Ellison and his backers (reportedly including his father, billionaire Oracle founder Larry Ellison) were undaunted by Redstone’s last-minute reversal in June. Parting with the media empire built by her father, Sumner Redstone, has never been an easy process. Shari Redstone, after taking the reins a decade ago as Sumner Redstone’s health declined, succeeded with signature initiative, bringing Viacom and CBS back under the same corporate umbrella after multiple attempts. The merger of the companies into what is now Paramount Global closed in December 2019.

The triumph of shepherding the merger turned out to be short-lived, with Covid and numerous other difficulties piling up as two companies became one. Today, Paramount faces considerable challenges on many fronts. The company, which is a fraction of the size of top media rivals Disney and Comcast, is straining to make a profit in streaming as it confronts secular declines in its linear TV business and an unsettled moviegoing climate. While Paramount shares have enjoyed an uptick on the merger news, they are still worth less than one-third what they were when Viacom and CBS came together.

As the company has explored various M&A scenarios, it has also jettisoned longtime CEO Bob Bakish in favor of a tripartite Office of the CEO consisting of veteran execs George Cheeks, Chris McCarthy and Brian Robbins. At the company’s annual shareholder meeting and a subsequent town hall with employees last month, the execs laid out their strategy, which consists of reducing expenses (targeting $500 million in annual cost savings), maximizing the asset portfolio and exploring streaming partnerships or joint ventures. Just before the most recent Skydance news broke last week, there were reports of Paramount in talks to sell BET and discussing a streaming partnership with a third party.

“While we recognize that this is not a traditional management structure, we are confident that it will enable them to move quickly to implement best practices throughout the company and to drive improved performance,” Redstone said at the annual meeting.

As the Office of the CEO gets set to pass the baton (former NBCUniversal CEO Jeff Shell is waiting in the wings as part of the Skydance bid), yet another round of downsizing will reshape the company’s workforce. At the end of 2023, the company had 21,900 full- and part-time employees.

“We’d like to take a moment to acknowledge the challenges of all the M&A speculation surrounding our company,” Robbins said during the town hall. “We know what a difficult and disruptive period it has been. And while we cannot say that the noise will disappear, we are here today to lay out a go-forward plan that can set us up for success no matter what path the company chooses to go down.”

Paramount And Skydance Are Said To Reach A Deal To Merge

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Just weeks after Paramount’s controlling shareholder and Skydance abruptly ended merger talks, the two sides have reached a preliminary deal to create a new Hollywood giant, four people familiar with the negotiations said Tuesday.

The agreement will still have to be approved by a special committee of Paramount’s board of directors, said the people, who spoke on the condition of anonymity as talks resumed.

Paramount — the parent company of CBS, MTV and Nickelodeon — and Skydance, the up-and-coming movie studio that helped produce “Top Gun: Maverick,” called off talks in June just before a scheduled vote on a merger. While the two sides had agreed on economic terms, Shari Redstone, Paramount’s controlling shareholder through its parent company, National Amusements, had clashed with Skydance in the final weeks of negotiations.

But the two sides have continued to talk, and now the Paramount board committee will evaluate whether new terms will be sufficiently palatable for shareholders, some of whom pushed back significantly against the last proposed deal. One likely point of focus will be the extent of protection offered to National Amusements in event of shareholder lawsuits.

In this latest deal, National Amusements’ equity would be valued at $1.75 billion, up slightly from $1.7 billion in the transaction’s last incarnation, three of the people said.

Paramount Global Is In Exclusive Talks To Sell BET For $1.6 Billion

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Paramount Global is in exclusive talks to sell its Black Entertainment Television network to buyers that include BET Chief Executive Officer Scott Mills and Chinh Chu, who runs the New York-based private equity firm CC Capital.

The group has been discussing an offer of $1.6 billion to $1.7 billion, people familiar with the matter said, asking not to be named revealing information that’s not public. 

Last year, the same group had discussed an offer of a little under $2 billion, Bloomberg reported in December. Chu and Mills are rekindling discussions with Paramount for BET after Shari Redstone, who has a controlling stake in Paramount, walked away from a proposed merger with Skydance Media, the company led by David Ellison. 

Representatives for Paramount and Chu declined to comment. Mills didn’t respond to a request for comment. The shares jumped on the news and were up 4.2% to $10.56 at 2:28 p.m. in New York.

Paramount, which owns CBS, MTV and other networks, had also previously received an offer from media mogul Byron Allen, who put together a $3.5 billion bid last year for both BET and the VH1 channel, and emphasized that BET should be Black-owned. Actor and filmmaker Tyler Perry, who is an investor in the BET+ streaming service, also held discussions about purchasing a stake in the larger enterprise.

The sale process last year was “disrespectful,” Perry said at a Bloomberg event last year. “Don’t try to get me to pay for something that’s not worth anywhere near the value” Paramount said it was, he said at the time.

Founded in 1980 by businessman Robert L. Johnson, BET was sold to Paramount’s predecessor, Viacom, in 2001 for about $3 billion. The network has strong ties to some of the most successful Black entertainment creators, including Perry, Kenya Barris and Rashida Jones, who are investors in the BET Studios production company.

Paramount has said it’s working to cut $500 million in costs to boost profitability.