Shareholders file lawsuit alleging illegal Trump deal in Paramount-Warner merger

Investors filed a complaint in Delaware Chancery Court on Tuesday seeking to block Paramount Pictures' proposed acquisition of Warner Bros. Discovery. The lawsuit alleges that David Ellison and his father, Larry Ellison, entered into an illegal arrangement with President Donald Trump to obtain approval for the transaction. According to the filing, the Ellisons promised sweeping changes at CNN, up to $20 million in free advertising, and a $16 million payment to Trump linked to a prior settlement involving a lawsuit against CBS.

The complaint asserts that these actions breach fiduciary duties and expose Paramount to “enormous financial and legal risk.” It names the Ellisons and several members of Paramount’s board as defendants. The filing also references a broader legal challenge, noting that a coalition of 12 state attorneys general, the Writers Guild of America and Paramount+ subscribers have sued to halt the merger.

“The Ellisons’ actions not only harm the reputations of the news outlets they currently own, which are hemorrhaging viewers, but they are latent liabilities waiting to be triggered by a future administration,” the complaint states.

“After receiving regulatory approval, the Ellisons proceeded to remake CBS in the President’s image, bought properties he enjoyed, and even hosted events to honor him,” the document adds, quoting lawyer Mary Thomas.

Paramount has not responded to requests for comment. The investors contend that Trump’s involvement helped Paramount win the bidding process and remove regulatory obstacles, and they warn that future congressional or administrative reviews could create long-term legal exposure for the studio.