shareholder

In the latest lawsuit against Paramount Skydance, a corporate shareholder has alleged corruption at the highest levels of the company, which is battling to complete its $111-billion takeover of rival Warner Bros. Discovery to create a new media behemoth.

Controlling shareholders Larry Ellison and his son David have presided over a firm that allegedly made “illegal promises and payments to secure regulatory approval,” for the Ellison family’s Paramount purchase last summer, according to the shareholder lawsuit filed this week in Delaware court.

Larry Ellison allegedly discussed with President Trump how Paramount’s pending Warner Bros. acquisition would result in a shake-up at CNN, states the lawsuit filed by Paramount shareholder Paul Robbins.

“The Ellisons [won] the bidding war for Warner Bros. by promising sweeping changes at CNN and other personal benefits to President Trump,” according to the 59-page complaint.

The case was brought on Robbins’ behalf by the nonprofit Public Integrity Project and the advocacy group Freedom of Press Foundation, which has been critical of the Trump’s administration policies toward the media.

The complaint noted that Netflix withdrew from the bidding in February — the same day Co-Chief Executive Ted Sarandos met at the White House with then-Atty. General Pam Bondi and another top official.

The lawsuit suggests Netflix dropped out after recognizing the challenges of dealing with the Trump Administration and that Trump always wanted to see the prize go to Paramount because of his close ties to the Ellison family, who have ushered in more favorable news coverage of Trump and the departure of late night comedian Stephen Colbert.

Robbins does not appear to have first-hand accounts supporting his claims, which are based on public documents and media reports about dealings between the Ellisons and Trump. He has owned Paramount stock since 2021, but the lawsuit does not say how many shares he owns.

He could not be reached for comment.

A Paramount spokesperson could not be immediately reached.

Previously, a Paramount spokesperson said: “No commitments from either David or Larry Ellison have been made to any government body, State AG or federal agency regarding the future of CNN or any other news property, other than the goal to deliver truth-based journalism.”

It’s the third lawsuit lobbed at Paramount this week. On Monday, California Atty. Gen. Rob Bonta led a coalition of 12 Democrat state attorneys general filed a federal antitrust lawsuit seeking to block the Paramount-Warner merger due to concerns about consolidation in movie distribution and cable channels.

The Writers Guild of America added another an antitrust lawsuit against Paramount on Tuesday, alleging the massive merger would result in fewer jobs and lower pay for writers.

Many in Hollywood are opposed to the deal due to fears that another studio consolidation would bring more layoffs, programming cutbacks and a fragile business environment due to the heavy debt burden — nearly $80 billion — that Paramount would have to take on to buy Warner Bros.

The shareholder lawsuit noted that Paramount participated in a raucous event with UFC fighters on the White House lawn in June to celebrate Trump’s 80th birthday and the nation’s 250th anniversary. Paramount has UFC broadcast rights.

The event came two days after Trump’s Justice Department wrapped its regulatory review of Paramount’s Warner Bros. proposal, giving the merger a key green light.

Justice Department investigators reportedly did not have a chance to express potential antitrust concerns when high-level Justice Department officials closed the inquiry — a major win for Paramount and the Ellisons, the lawsuit states.

“There have been some line attorneys in the DOJ that have reviewed this [merger] and have some concerns,” New York Atty. Gen. Letitia James said Tuesday during a virtual town hall with opponents of the merger. “Their analysis of this particular case was ignored by the front office, if you will, at 1600 Pennsylvania Ave. [the White House] That’s the front office.”

Ellison’s Skydance Media emerged with its deal to buy Paramount two years ago. Previous controlling shareholder, Shari Redstone, was desperate for an exit and Trump was mounting his White House comeback by battling then-President Joe Biden, then Kamala Harris.

Trump declined an invitation to appear on CBS’ “60 Minutes,” then under Redstone control. He became infuriated by an October 2024 interview with Harris on “60 Minutes.”

Trump filed a $10 billion lawsuit against CBS (he later upped it to $20 billion). After Trump won the election, he had considerable sway over Paramount because it needed his administration’s approval for the sale to the Ellisons.

Paramount agreed to pay Trump $16 million to end his “60 Minutes” lawsuit, allowing the sale to go forward. The Ellisons acquired Paramount in August, then set their sights on Warner Bros. Discovery, which owns CNN.

“The Ellisons proceeded to remake CBS in the President’s image, bought properties he enjoyed, and even hosted events to honor him,” the lawsuit said. “This helped the Ellisons, but it appears to have hurt Paramount and its media outlets.”

In late April, David Ellison hosted an elaborate dinner in Washington to honor the “Trump White House,” according to invitations to the event, “even though President Trump continually insulted journalists at CBS and elsewhere,” the lawsuit said.

On Wednesday, during a confirmation hearing on Capitol Hill, U.S. Sen. Cory Booker (D-NJ) blasted acting Atty. General Todd Blanche for his attendance at the dinner while his agency was reviewing the Paramount deal.

Also on Wednesday, the nonprofit news site ProPublica reported Federal Communications Commission Chairman Brendan Carr has accepted $63,000 in free tickets from CBS in recent years — while Paramount mergers were pending.

Times Staff Writer Ben Wieder contributed to this report.

A Delaware Court of Chancery judge delivered a blow to wrestling impresario Vince McMahon and other World Wrestling Entertainment officials earlier this week.

Judge J. Travis Laster, vice chancellor of the Delaware Court of Chancery, issued sanctions for “spoliation of evidence” in the shareholder lawsuit over the 2023 merger between Ultimate Fighting Championship and WWE.

Laster ruled on Tuesday that WWE executives destroyed evidence by using the auto-delete setting on the messaging app Signal, enabling potentially relevant communications to be deleted.

The ruling means the court will operate under the assumption that five potentially damaging statements are true while allowing the defendants to rebut them.

The statements, according to the ruling, include that McMahon’s decision on the merger was “influenced” by Endeavor Executive Chairman Ari Emanuel’s “promise” to provide him with a continued role at the company and to indemnify him and provide legal support as federal investigators were looking into claims of alleged sexual misconduct.

McMahon pursued a deal with Endeavor in 2022 before WWE initiated its strategic review process, and both McMahon and then-WWE President Nick Khan worked with The Raine Group, a strategic financial advisor, “to steer the process to Endeavor and away from other potential bidders,” the ruling states.

In September 2023, entertainment giant Endeavor, the parent company of UFC, acquired WWE and merged the two sports entities to form a new, publicly traded company, TKO Group Holdings, in a deal worth $21.4 billion.

A month later, a group of shareholders filed suit against McMahon and other company officials in Delaware Chancery Court, claiming McMahon orchestrated a “sham sale process.”

Representatives for McMahon, WWE and TKO were not immediately available for comment.

According to the suit, McMahon, WWE’s controlling shareholder, turned down higher offers and excluded other bidders who would have ousted him and instead chose a deal that favored Endeavor’s Emanuel, a “close friend and longtime ally,” enabling McMahon to continue running WWE and shielding him from federal investigations related to a raft of sexual misconduct claims.

The complaint also alleges that the $21.4-billion deal undervalued the company and was “far below the offers” WWE’s board could have received from other interested parties had they “made any effort to negotiate in good faith.”

The litigation is related to the 2022 investigation by WWE’s board that found that McMahon made at least $14.6 million in payments between 2006 and 2022 for “alleged misconduct.” McMahon has denied claims of misconduct.

The settlements were made to women, including WWE employees, who alleged that McMahon initiated unwanted sexual contact and coerced women into performing sexual acts on him. In one case, first reported by the Wall Street Journal, a woman claimed that McMahon sent her unsolicited nude photos of himself.

McMahon’s alleged misconduct became the subject of ongoing investigations by the Securities and Exchange Commission and the U.S. Department of Justice.

“I am confident that the government’s investigation will be resolved without any findings of wrongdoing,” McMahon said in a statement to The Times in 2023.

Last January, the SEC announced it had settled charges against McMahon alleging he had violated federal securities laws by failing to disclose a pair of settlement agreements to WWE worth $10.5 million.

McMahon agreed to pay more than $1.7 million in a civil penalty and in reimbursement to WWE, without admitting or denying the agency’s findings. Federal prosecutors also have dropped their criminal investigation.

In January 2024, McMahon resigned as executive chairman of the board of TKO Group, one day after a former WWE employee, Janel Grant, sued the company, McMahon and former head of talent relations John Laurinaitis, alleging sexual assault, trafficking and emotional abuse.

Grant claimed that McMahon agreed to pay her $3 million in exchange for her silence.

The shareholder trial is set to begin on June 8. McMahon, Emanuel, Khan, TKO President Mark Shapiro, and WWE Chief Content Officer Paul “Triple H” Levesque are expected to testify.

Reed Hastings, who helped launched Netflix from a fledgling DVD mail-order business into a global streaming juggernaut, plans to exit the company after nearly three decades.

Hastings will leave the company he co-founded to focus on philanthropy and other efforts, the streaming company announced said Thursday.

Hastings, who serves as chairman of the Los Gatos company’s board, told Netflix he will not stand for reelection when his term expires in June, Netflix said in a letter to shareholders timed to its fiscal first-quarter earnings.

He said the commitment of Netflix Co-Chief Executives Ted Sarandos and Greg Peters was “so strong that I can now focus on new things.”

Peters described Hastings, 65, as the company’s “biggest champion,” and that he “is a part of our DNA.”

Sarandos called Hastings a “true history maker,” saying in a statement that Hastings’ “selfless, disciplined leadership style” will continue to shape Netflix’s path ahead.

Hastings’ exit was not unexpected as his role in the company diminished after he stepped aside as co-chief executive of Netflix in 2023.

During his tenure, Hastings oversaw the substantial growth of the streaming colossus. Today, Netflix has a market cap of about $455 billion, more than double that of the Walt Disney Co.

“My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come,” Hastings said in a statement.

For the first quarter of 2026, Netflix reported nearly $12.3 billion of revenue, up 16% compared to the same time period a year ago. Operating income grew 18% to $3.9 billion for the three-month period ending March 31.

Both figures were ahead of the company’s guidance, a feat the streamer attributed to slightly higher than expected subscription revenue.

The company reported net income of $5.3 billion, up more than 80% compared to the $2.9 billion it recorded during the same period last year. Earnings per share was $1.23, up from 66 cents last year.

Netflix said it continues to expect 2026 revenue ranging from $50.7 billion to $51.7 billion, with an operating margin of 31.5%.

The earnings release and the Hastings announcement came after markets closed.

Netflix shares closed at $107.79, virtually unchanged. After hours, the shares dropped more than 8% to $98.26. They have climbed about 18% this year.

The Los Gatos-based company had previously secured an $82.7-billion deal to buy Warner Bros. studios and streaming services in December but it withdrew from the bidding war in late February after Paramount Skydance offered $31 a share. As part of the switch, Netflix was paid a $2.8-billion termination fee.

“Warner Bros. would have been a nice accelerant for our strategy, but only at the right price,” Netflix said in its investor letter. “We have multiple ways to achieve our goals (including producing, licensing, and partnering) and we’re constantly seeking to allocate our resources to the most attractive opportunities to maximize the value we are delivering to our members.”

Before Reed Hastings revolutionized the global entertainment business, he sold Rainbow vacuum cleaners door-to-door during his gap year between high school and Bowdoin College, where he earned his bachelor’s degree in mathematics.

During his sales pitch, Reed would first clean a homeowner’s carpet with their vacuum and then demonstrate how to clean using a Rainbow. The job helped hone his ability to understand customers, a core foundation of Netflix’s user-driven, candor-obsessed culture.

After Bowdoin and before he earned his master’s degree in computer science at Stanford, Hastings served in the Peace Corps (he also did a stint in the Marines) teaching high school math in Swaziland (now Eswatini).

“Once you have hitchhiked across Africa with ten bucks in your pocket, starting a business doesn’t seem too intimidating,” he told Time magazine.

While those experiences helped shape Hasting’s business sense, it was a late fee for a video that became the catalyst for launching Netflix, upending the way viewers consumed content and disrupting how Hollywood does business.

As the story goes, Hastings had misplaced a VHS tape of “Apollo 13” racking up a hefty $40 charge.

It was 1997 and his company Pure Software had just been acquired. It dawned on him that a gym membership offered a better business model, than the average video store — where you paid a set fee for the month and you could work out as much or as little as you liked. He thought, why not apply that to the movie rental business?

Netflix, began in Scotts Valley, Calif., as a mail-order business. Customers paid a tiered monthly fee to rent DVDs online which were delivered by mail.

The business exploded racking up millions of customers as it jettisoned the post office to an internet-based business. As the business accelerated across the world it also expanded, creating original content such as award-winning blockbusters such as “Stranger Things” and “House of Cards.”

The company’s innovation extended internally too. Hastings became known for implementing a unique and controversial culture of radical transparency, where employee evaluations are brutally candid and average performances can be grounds for termination.

The concept was a central theme of his 2020 book “No Rules Rules: Netflix and the Culture of Reinvention,” written with business professor Erin Meyer.

Times staff writers Meg James and Wendy Lee contributed to this report.