In a dramatic escalation of tensions within a high-stakes media merger battle, Paramount Skydance Corp. has publicly accused Warner Bros. Discovery Inc. of conducting a 'tainted' sale process that fails to serve shareholder interests. The allegations were made in a formal letter sent to Warner Bros. CEO David Zaslav.
Allegations of a Biased Bidding War
Attorneys for Paramount, in the letter which was later published by CNBC, claimed that Warner Bros. has abandoned a fair transaction process. They argue the entertainment conglomerate is steering the sale towards a predetermined outcome that favours a single bidder, specifically rival streaming giant Netflix Inc. This accusation comes despite Paramount having submitted five separate offers for the company.
'It has become increasingly clear... that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders,' the letter stated. Paramount's core contention is that the process lacks impartial oversight.
Conflicts of Interest and Calls for an Independent Committee
Paramount expressed deep concern over potential management conflicts, suggesting the sales process is compromised by 'certain members of management’s potential personal interests in post-transaction roles and compensation'. The letter points to recent amendments to employment arrangements that may have created biased economic incentives.
To address these concerns, Paramount demanded clarity on whether Warner Bros. has appointed an independent special committee of disinterested board members to oversee the sale. 'If not, we strongly urge you to empower such a special committee... to ensure the fairness and unimpeachability of the transaction process,' the letter urged.
Warner Bros. Response and the State of the Bids
In response, Warner Bros. stated it had shared the Paramount letter with its board of directors. The company defended its procedures, asserting, '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.' A spokesperson for Paramount declined to provide further comment.
The corporate drama unfolds as Warner Bros. moves closer to a final decision on its future. The company officially put itself up for sale in October after receiving initial offers, triggering a competitive auction. A second formal round of bids concluded on December 1, with three media companies submitting offers.
According to Bloomberg reports, Netflix's bid is primarily cash-based and is valued higher than Paramount's offer. However, Paramount remains the only suitor bidding for the entire company, including cable-TV assets like CNN and TNT. Netflix and Comcast Corp. are solely interested in the Warner Bros. film and TV studios along with the HBO Max streaming service. The Warner Bros. board is currently weighing the offers and a final decision is expected within days.
