In a high-profile legal and corporate showdown, Warner Bros. Discovery (WBD) responded forcefully to the lawsuit filed by Paramount Skydance, calling it "baseless" and accusing its rival of trying to "distract" investors amid a battle for control of the company.

The The conflict erupted after Paramount Skydance filed a lawsuit on January 12 in the Delaware Court of Chancery. The legal action seeks to force WBD to disclose key financial details about its merger agreement with Netflix, specifically the valuation assigned to the Discovery Global business. This segment, which will include assets such as CNN, TBS, HGTV, and Discovery+ following a spin-off planned for the third quarter of 2026, is central to determining the true value of the transaction with the streaming platform. Warner Bros. Discovery defends its decision. In an official statement, Warner Bros. Discovery defended its decision and criticized Paramount Skydance's tactics: “Despite multiple opportunities, Paramount Skydance continues to propose a transaction that our board of directors unanimously concluded is no better than the merger agreement with Netflix.” The company added that, after six weeks of media pressure, its competitor “has neither raised the price nor addressed the numerous and obvious shortcomings of its offer.” The dispute dates back to the offensive launched by David Ellison, president and CEO of Paramount, following Skydance Media’s acquisition of Paramount Global in August 2015. Backed by major investors, including his father Larry Ellison, co-founder of Oracle, Ellison submitted eight consecutive offers to acquire Warner Bros. Discovery in its entirety. All were rejected by the WBD board of directors. Ultimately, the board opted for a deal with Netflix, announced late last year. Under the terms, Netflix will pay $27.75 per share (in cash and stock) in exchange for Warner Bros.’ film and television studios.HBO, HBO Max, and the video game business. Paramount Skydance, however, has not given up. Its offer of $30 per share in cash, it argues, is superior. One of the cornerstones of its strategy is to challenge the valuation of Discovery Global within the agreement with Netflix. In an analysis released on January 8, Paramount argued that, due to the drop in Netflix's stock price, the total value for WBD shareholders would have been reduced to $27.42 per share, implying that Discovery Global is being valued at virtually zero in the transaction. The lawsuit seeks to clarify precisely how that asset package is valued and how much debt will be transferred to it, information that Paramount considers "essential" for shareholders to assess the true value of the agreement with Netflix. Beyond the courts, Paramount Skydance upped the ante by announcing its intention to present an alternative slate of candidates for the WBD board of directors at the 2026 shareholders' meeting. This move seeks to pressure the current management to reopen negotiations on its offer.