Paramount Responds to Shareholder Derivative Lawsuit Over Warner Bros. Discovery Deal
Paramount said the lawsuit filed by a shareholder alleging improper political dealings and fiduciary breaches is based on previously addressed claims, while the plaintiff contends the Ellisons traded editorial independence for regulatory approval.
Paramount issued a statement this week rejecting a derivative lawsuit filed in Delaware Chancery Court by shareholder Paul Robbins, who alleges that CEO David Ellison, his father Larry Ellison and the company’s board breached fiduciary duties in pursuing the Warner Bros. Discovery merger. Robbins claims the Ellisons promised political favors to secure regulatory approval, including changes to CNN’s news coverage and settlement of a lawsuit involving President Trump, and that these actions constitute an illegal bribery scheme.
The company’s spokesperson said the suit “recycles allegations that have already been reported and already addressed,” adding that no commitments have been made to any government entity regarding CNN or other news properties beyond a goal of “truth-based journalism.” The statement also noted that Skydance executives have engaged in routine interactions with government officials as part of standard regulatory review and have complied with applicable laws, including anti-bribery statutes.
Paramount emphasized that the Warner Bros. Discovery transaction “stands on its own merits,” arguing that the combined libraries and platforms will increase consumer choice, support original programming and strengthen competition in streaming. The company said it remains confident in the merger’s fundamentals and will continue toward closing.
Robbins’ complaint, supported by the Freedom of the Press Foundation and the Public Integrity Project, alleges that the Ellisons offered up to $20 million in advertising and facilitated a $16 million payment to President Trump in exchange for favorable treatment by the Federal Communications Commission. The suit also asserts that the Ellisons intended to alter CNN’s editorial line and settle a lawsuit brought by the President against CBS.
Paramount has denied any side deal for advertising and maintains that all interactions with regulators have been lawful and customary. The lawsuit arrives amid other legal challenges to the $110-billion merger, including an antitrust suit by a coalition of state attorneys general and actions by the Writers Guild of America and Paramount+ subscribers.