If you thought the ‘Will They, Won’t They?’ drama between Warner Bros. Discovery (WBD) and Paramount Skydance was tense before, you might want to grab some popcorn.
As of yesterday, Monday, January 12, the boardroom brawl has officially spilled into the courtroom.
David Ellison’s Paramount Skydance has filed a lawsuit against WBD in the Delaware Chancery Court. The filing effectively accuses David Zaslav and his board of keeping shareholders in the dark.
The suit seeks to force WBD to hand over the “basic, material valuation information” behind its decision to reject Paramount’s $108.4 billion hostile bid in favour of a merger with Netflix.
“Show your work,” says Ellison
The core of the lawsuit is simple. Paramount claims WBD is asking investors to blindly trust that the Netflix deal is better than Paramount’s $30-per-share all-cash offer.
In a statement cited by Variety, David Ellison didn’t pull his punches. He argued that the WBD board has “provided increasingly novel reasons for avoiding a transaction with Paramount.” He added that the board “has never said, because it cannot, that the Netflix transaction is financially superior to our actual offer.”
Essentially, Ellison is accusing the board of hiding the math. The suit alleges WBD has failed to explain how it valued the “Discovery Global” spinoff. This is the entity that will house the linear leftovers like CNN and TNT Sports. Paramount has previously dismissed this spinoff as ‘worthless’ stub equity. Yet WBD insists it is a key part of the Netflix deal’s value.
Paramount isn’t going to crumble to Netflix without a fight
The proxy fight begins
But wait, there is more. This is not just a ‘give us the documents’ lawsuit. It is the first strike in a full-blown proxy war.
The Guardian reports that Paramount Skydance intends to nominate its own slate of directors to the WBD board at the 2026 annual meeting. Their strategy is a classic corporate siege tactic.
Paramount plans to install a new set of directors who are sympathetic to their bid. These new directors would then exercise WBD’s rights under the Netflix agreement to engage with Paramount’s offer instead.
If you can’t convince the generals to surrender, you simply replace them.
Paramount is also proposing a bylaw amendment that would require shareholder approval for any spinoff of the cable business.
This is a direct torpedo aimed at the structure of the Netflix merger, which relies on spinning off those linear assets to get the deal past regulators.
Paramount Skydance intends to nominate its own slate of directors to the WBD board
A meritless distraction?
WBD has yet to issue a lengthy rebuttal. However, Front Office Sports notes the company has previously dismissed Paramount’s claims as ‘meritless.’ They maintain that the Paramount bid is a debt-laden risk that could destroy value. Conversely, they argue the Netflix deal offers strategic certainty and growth.
With the tender offer expiration date of January 21, 2026 looming, this lawsuit feels like a desperate final play from the Ellison camp.
They are running out of time to convince shareholders to tender their shares. If the courts do not intervene to pause the clock or force a disclosure, the bid could expire before the truth comes out.
For David Zaslav, the irony is sharp. He built an empire on the name ‘Discovery.’
If David Ellison gets his way in court, the legal definition of that word might just be the thing that undoes him.