warner bros. acquisition

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.

The U.S. Justice Department has cleared the way for Paramount Skydance’s $111-billion purchase of Warner Bros. Discovery — a major milestone that moves David Ellison closer to his goal.

After a months-long review, Justice Department antitrust regulators on Friday concluded the combination would not violate federal anticompetition laws. Approval had been expected because President Trump — who has friendly ties with Ellison and his father, tech billionaire Larry Ellison — favors the deal.

The government stopped short of asking Paramount to make concessions or divestitures.

Buying Warner Bros. would allow Paramount — Hollywood’s smallest major company — to bulk up with such prestigious properties as HBO, CNN, HGTV and Food Network. Those would be combined with properties Paramount already owns, including CBS, Comedy Central, Nickelodeon and MTV.

The deal would put two historic film studios and two prominent news organizations under the same roof. It would give Paramount four streaming services, including HBO Max, and dozens of cable channels.

In its four-page closing statement, the Justice Department emphasized that career antitrust regulators — not political appointees — had performed a rigorous review, sifting through some two million documents the government received from dozens of sources, including third-party organizations.

They conducted meetings and deposed senior-level executives and other witnesses.

“These investigative efforts all led to the same conclusion: the film and television industry is highly dynamic, and the proposed transaction is not likely to harm competition or American consumers,” Justice Department regulators wrote in their summary.

Regulators zeroed in on three potential areas of concern. They looked at whether the merger would give Paramount too much power in the streaming video-on-demand market; the traditional linear television channel space; as well as in “studio development, production, or distribution of films for theatrical release,” the Justice Department said.

Competition in streaming would not be crimped, according to the regulators.

“To the contrary, the combined firm is likely to increase competition by offering consumers a more robust competitive alternative to the larger [streaming] offerings,” they wrote.

The antitrust division also found that theatrical distribution and opportunities for creators, including writers and actors, would not be harmed as long as the combined company maintained current production levels.

Ellison has promised to continue releasing 30 films a year with a combined Warner Bros.-Paramount studio. He also has said he would protect the HBO brand.

The proposed merger is controversial because many in Hollywood fear it will bring thousands of job losses, which was the result of past consolidations, including Walt Disney Co.’s 2019 takeover of Fox entertainment properties. More than 5,000 entertainment industry workers, including Jane Fonda, J.J. Abrams, Javier Bardem and Mark Ruffalo, have signed an open letter calling for the merger to be blocked.

There’s a political dimension as well. Paramount’s standing with the Trump administration (Paramount+ is set to televise Sunday’s UFC fight spectacle at the White House to celebrate Trump’s birthday as part of the company’s relationship with the UFC) has given left-leaning groups pause.

They worry about collapsing CNN and CBS News into one unit, particularly after all the turmoil that has ensued at CBS News since the Ellison family bought Paramount in August and installed Bari Weiss as CBS News editor in chief.

This month witnessed a dramatic shakeup at the iconic “60 Minutes,” with top executives and three well-known correspondents tossed out.

“We’ve already seen how far Paramount and the Ellison family are willing to go to diminish a once-proud network and news organization like CBS,” Craig Aaron, co-chief executive of the progressive group Free Press, said in a statement. His group fears the Ellisons would “do worse if they get their hands on Warner Bros., HBO, CNN and all the rest.”

Paramount, for its part, said it was grateful for “the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date.”

“This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment,” Paramount said. “We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole.”

Paramount wants to finalize its purchase by September.

With Friday’s victory, Paramount is staying on that timetable, but regulators in Europe and Britain have opened their own regulatory investigations and are expected to make their own determinations in the coming months.

Separately, California Atty. Gen. Rob Bonta and other state attorneys general have been scrutinizing the proposed merger, and are widely expected to file a lawsuit, perhaps as early as this month, to try to block it.

Paramount applied for Justice Department approval in December — more than two months before it edged out Netflix in the Warner sweepstakes.

In its statement, the Justice Department said it began its review last fall when it was clear Warner Bros. was in play. Regulators said they were familiar with Warner’s businesses, because the division had scrutinized four other mergers involving the company, dating back to the disastrous AOL-Time Warner merger in 2001.

Paramount’s deal would mark the third time Warner has changed hands in the last decade. AT&T bought the company in 2018 and then sold it to the smaller Discovery four years later. That deal left Warner Bros. burdened by debt, setting the stage for the Ellison takeover.

Justice Department approval could complicate efforts by Bonta and other state attorneys general to block the deal. Should Bonta or others sue, they would have to convince a judge that the nation’s top antitrust regulators failed to make a proper finding despite their lengthy review.

That may pose a high bar for the state officials, who are facing political pressure to stop the deal.

“State AGs must block this merger,” U.S. Sen. Elizabeth Warren (D-Mass.) said in a statement Friday, adding that the Justice Department’s approval was “terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay.”

The Justice Department said state attorney general offices had participated in its investigation, which allowed federal and state officials “to share information with each other and for the States to attend and participate in the [antitrust] Division’s depositions.”

Last month, David Ellison appeared before the regulators in a two-hour session.

Paramount’s Chief Legal Officer Makan Delrahim, who previously served as the nation’s top antitrust regulator during the first Trump administration, also was busy quarterbacking Paramount’s outreach with regulators.