WBD Highlights Pressure Tactics as Paramount’s Legal Letter Backfires Before Final Bids
The ongoing negotiations involving Warner Bros. Discovery (WBD) reached a critical point Wednesday as the company publicly defended its decision to select Netflix as the winning bidder in a highly competitive auction.
In a letter to shareholders and corresponding disclosures, WBD outlined the rationale for dismissing competing offers from Paramount, Comcast, and two unidentified parties. The board specifically noted an unfortunate letter from Paramount’s attorneys that emerged at a pivotal moment in the proceedings as a key factor in their decision to reject the proposal.
“PSKY threatened WBD with unfounded allegations as a pressure tactic,” Warner Bros. stated in a detailed SEC filing. This referred to a letter sent by Quinn Emanuel on behalf of Paramount, which accused WBD directors of bias and management of conflicts of interest related to prospective post-transaction roles.
Watch on Deadline
On the same day, WBD’s board urged shareholders to reject Paramount’s hostile $108 billion takeover bid and provided context for its preference for Netflix’s offer of $82.7 billion for WBD’s studio and streaming operations. In response, Paramount reiterated its stance, deeming its offer “superior.” The filings also revealed that WBD CEO David Zaslav could potentially reap hundreds of millions of dollars through the successful negotiation.
“In fact,” WBD countered, “the only post-transaction roles discussed with WBD management by any bidder were PSKY’s repeated offers to Mr. Zaslav for several hundred million dollars to be co-CEO and co-chairman of PSKY. Mr. Zaslav declined these proposals and disclosed them to the WBD Board.”
WBD drew attention to the engagement of Quinn Emanuel by PSKY, likening it to Elon Musk’s efforts to withdraw from the acquisition of Twitter, suggesting a pattern of a litigious approach rather than a constructive negotiation process. “Indeed,” WBD noted, “representatives of PSKY’s legal and financial advisors reached out separately on December 3 and 4, 2025, regarding the December 3 letter, describing it as ‘not helpful’ and a ‘mistake.’”
In earlier communications, Paramount announced it had offered Zaslav the role of co-chairman and CEO of a combined Paramount-WBD, marking the first mention of “hundreds of millions of dollars” in the recent filings.
All In The Timing
The contentious letter emerged at a crucial juncture on December 3, just two days after secondary bids were submitted and following WBD’s decision to advance discussions with Netflix as it “submitted the meaningfully highest bid.” WBD disclosed that, while they proceeded with Netflix, they were still in communication with Comcast and PSKY to provide feedback on their proposals.
WBD described the methodical dissemination of the Quinn Emanuel letter, which was emailed to Zaslav and delivered to various law firms advising WBD. The correspondence failed to specify any proposals aimed at improving Paramount’s bid.
Netflix’s legal team, however, submitted revised drafts of their merger agreement, while PSKY delivered an updated proposal shortly thereafter, albeit WBD contended that it did not exceed Netflix’s offer.
As negotiations progressed, WBD’s board convened again on December 4 to review the competing offers. During this meeting, Zaslav received a text from D. Ellison, which indicated that PSKY’s latest offer was not the “best and final,” despite prior advisements about the timeline.
As deliberations continued, WBD officially entered into an agreement with Netflix later that evening.
The following Monday, Paramount launched its hostile takeover bid, establishing a January 8 deadline for WBD shareholders to accept its offer of $30 per share in cash. The Netflix deal, in contrast, is structured at $23.25 in cash and approximately $4.50 worth of stock, subject to share price fluctuations prior to closing.
Argument To Shareholders
In what marked WBD’s first formal reaction to the hostile bid, the company strongly recommended that shareholders reject Paramount’s offer, citing various reasons for its preference for Netflix. This positioned WBD in direct contradiction to Paramount’s account of the bidding process, which characterized WBD as unresponsive and lacking in guidance.
Paramount had submitted six bids to acquire WBD, three of which were unsolicited and three part of the formal process, culminating in the all-cash $30-per-share offer.
Despite Paramount’s assertions of a superior offer capable of easily navigating regulatory hurdles, WBD disputes these claims, emphasizing concerns about the provided financing—and highlighting the involvement of Middle Eastern sovereign funds alongside the Ellison Family Trust in Paramount’s proposal.
WBD has sought to clarify misconceptions regarding financing, pointing out that it is not secured by Larry Ellison personally, but by a trust with undisclosed terms and conditions that pose potential risks for WBD shareholders.
Taking Digs
WBD also raised several additional concerns about PSKY’s approach, including allegations of “pressure tactics” and inappropriate behavior during negotiations.
On November 25, 2025, WBD and PSKY executed a ‘clean team’ confidentiality agreement, which was subject to extensive negotiation due to PSKY’s initial request for access by an unusually high number of individuals deemed inappropriate by WBD.
Paramount previously criticized WBD for a perceived delay in granting access to its data room.
Dramatic narratives surrounding Zaslav’s compensation have arisen throughout the process. If Paramount’s bid succeeds, his potential “golden parachute” payout could exceed $500 million based on existing agreements.
WBD has yet to file the merger proxy for the Netflix agreement, a document that is expected to reveal potential executive payouts associated with that deal.
