It appears that Warner Bros. Discovery is still up for sale. According to Deadline, Paramount CEO David Ellison alleges that the sale process is unfair and that WBD allegedly favors Netflix. In a letter to WBD CEO, David Zaslav, David Ellison stated, “It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder. We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.”
Deadline notes that WBD responded to the letter stating, “Please be assured that the WBD board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so.”
According to Deadline, Paramount accused WBD management of an alleged conflict of interest after hearing alleged reports that it was leaning toward Netflix.
“Paramount has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements.” Paramount continued in its memo via Deadline. “These concerns are amplified by indications of director bias and beholdenness to others whose interests may not align with the stockholders’, and the fact that alternatives involving only certain WBD assets are being prioritized notwithstanding their heightened regulatory risk and potential to deprive stockholders of consideration for the entirety of WBD’s enterprise value.”
According to Deadline, Paramount has requested that WBD assign a special committee of board members to review all transactional opportunities and determine if they should continue forward or break the potential sale. Rumor has it that Paramount allegedly offered Zaslav a role in the possible combined company. Paramount stated that its offer “would provide the maximum value to WBD stockholders.”
Deadline reported that there have been talks about the possible merger in the media. Rep. Darrell Issa (California) sent letter to Washington, DC, concerning antitrust issues that could arise with a Netflix-WBD deal. A German newspaper also reported that concerns about Ellison’s acquisition of WBD could lead to excessive media concentration.