Warner Bros. Discovery's ongoing sale has taken an unexpected turn. The company is currently going over a second round bids originally submitted on December 1, following the first round being delivered on November 20. Important information has come out regarding the process since. Netflix was said to have offered a mostly all-cash bid, while Paramount reportedly partnered with Middle Eastern funds to increase its initial offer for the company.
As it's often the case with mergers—particularly of this scale—the bidding process did not end up being a straightforward one. In this case, however, it experienced a drastic shift in tone, as Paramount has accused WBD of potentially unfair bidding practices, claims that arose following the company's suspicions that Zaslav had been biased against Paramount becoming the new owner of WBD, per CNBC.
On December 3, the Quinn Emanuel law firm sent a letter to Warner Bros. Discovery CEO David Zaslav on behalf of Paramount Skydance (published in full by CNBC), accusing the company of potentially having "abandoned [...] a fair transaction process." Paramount further said WBD had undergone a "myopic" process favoring a specific potential buyer:
"Dear Mr. Zaslav: We write on behalf of Paramount Skydance Corporation ('Paramount,' 'we' or 'us') to express our serious concerns about the fairness and adequacy of the bidding process for a potential combination with Warner Bros. Discovery ('WBD' or 'you'). It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder. We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD."
The letter went on to quote an article from German newspaper Handelsblatt, which was said to have published a report detailing a supposed meeting between the President of WBD's International Business Gerhard Zieler, a "direct report to WBD's Chief Executive Officer," and Hena Virkkunen, Vice President of the E.U. Commission. Worries were said to have been communicated during the meeting about a Paramount-WBD merger leading to "excessive media concentration." This, it was stated, could, in turn, lead to the potential intervention of the Commission in a merger between the two companies.
Per the article quoted, sources close to Zieler stated both the Commission and Warner Bros. Discovery wished to "preserve media diversity." According to Paramount, the meeting represented resistance (and even a potential sabotage) of Paramount's efforts to acquire WBD: "The implications of such a meeting, if it occurred, are clear and evince a tacit resistance to, if not active sabotage of, a Paramount offer."
The letter further stated that media coverage had positioned Netflix as the best option to acquire Warner Bros., while painting Paramount in a negative light:
"Several U.S. media outlets have reported on the enthusiasm by WBD management for a transaction with Netflix, and on statements by management that a transaction between WBD and Netflix would be a 'slam dunk,' while also referring to Paramount's bid in a negative light. Additional reporting since the submission of revised bids on December 1 has indicated that WBD's 'board has really warmed to' a transaction with Netflix due to the 'chemistry between' WBD management and Netflix management."
According to CNBC, the letter stemmed from the David Ellison-led company suspecting that Warner Bros. Discovery didn't intend to merge with Paramount, and instead preferred to complete the split it announced earlier in 2025. This is important to note given the fact that, should WBD indeed favor a split, Netflix and Comcast are interested specifically in the studio assets of Warner Bros. Discovery, and not on its traditional cable brands. Paramount, on the other hand, intends to buy the entire company.
Paramount's letter further said that the company had, "a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management's potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements."
The David Ellison-run company also sought confirmation from WBD that an independent group of board members had been put in place to "consider the potential transaction opportunities": "In light of our grave concerns regarding the integrity of WBD’s process, we seek confirmation as to whether WBD has appointed an independent special committee of disinterested members of its board to consider the potential transaction opportunities and to make a final determination regarding a sale or break-up of all or part of the company."
The message took a friendlier tone toward the end, mentioning the potential that would stem from combining Paramount with Warner Bros. Discovery:
"Engaging with WBD throughout this process, we have been encouraged by the enormous potential from a combination of our entities. We remain confident that the Paramount offer would provide the maximum value to WBD stockholders and look forward to the opportunity to continue to engage with you productively in this process."
Following the letter, on December 4, Warner Bros. Discovery responded to Paramount, assuring that the company's sale-related legal obligations were being handled with "the utmost care" (via Variety):
"We have shared the letter with the members of the Warner Bros. Discovery ('WBD') board of directors. 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."