Warner Bros. Discovery went on the attack against Larry and David Ellison on Wednesday, urging shareholders to reject their hostile takeover offer and saying the Ellisons have “consistently misled” them.

Paramount, which is controlled by the Ellisons, has said that its proposed transaction has a “full backstop” from the billionaire family. But Warner Bros. Discovery said in a letter to shareholders Wednesday: “It does not, and never has.”

The decision throws another wrench into Paramount’s frenzied, monthslong effort to buy Warner Bros. Discovery — a make-or-break attempt, analysts said, to compete with streaming giants like Netflix, Disney and Amazon. Warner Bros. Discovery agreed this month to sell a large part of its business to Netflix in a cash-and-stock deal worth $83 billion, spurning an all-cash offer by Paramount to buy all of the company for $108 billion.

Paramount, which made six offers for Warner Bros. Discovery over 12 weeks, now faces difficult decisions, including whether to raise its offer.

A spokesperson for Paramount did not immediately respond to a request for comment.

The Netflix deal would remake Hollywood, bringing under Netflix’s auspice the HBO Max streaming service and the Warner Bros. movie and TV studio. Netflix, which far outpaces other paid streaming services in subscriber numbers, would also become a video game and consumer products colossus, controlling characters like Batman, Harry Potter and Bugs Bunny.

But Paramount has refused to surrender. Saying it wasn’t treated fairly in the auction process, the company started a hostile takeover bid last week by taking its offer directly to Warner Bros. Discovery shareholders. In a letter to those shareholders, Paramount insisted that its offer “delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix.”

Warner Bros. Discovery defended its sale process Wednesday, arguing the Netflix deal offers a shareholders a better return than the one provided by Paramount. Warner said its sale process was “full, transparent and competitive.” The company said it held dozens of calls and meetings with Paramount, including four in-person meetings and meals between Warner Bros. Discovery’s CEO, David Zaslav, and one or more of the Ellisons. David Ellison, Paramount’s CEO, has been backed his father, billionaire technology titan Larry Ellison.

Zaslav told the Warner Bros. Discovery board that the Ellisons said he would receive a compensation package worth several hundred million dollars if a deal was reached, according to a legal filing Warner submitted Wednesday. Zaslav told the board that he had “informed the Ellisons that it would be inappropriate to discuss any such arrangements at that time.”

Paramount has said the Ellison family is backstopping the vast majority of the $40 billion equity check included in the deal. But the legal entity backing the bid is a revocable trust run by Larry Ellison, a major concern for Warner Bros. Discovery’s board.

“A revocable trust is no replacement for a secured commitment by a controlling stockholder,” Warner Bros. Discovery wrote, noting the assets and liabilities in a trust are not public and can be modified at any time.

The board said it had told Paramount “repeatedly” of the importance of “a full and unconditional financing commitment from the Ellison family.” The board worried that without a personal guarantee from the Ellison family, it would have limited recourse if Paramount’s bid fell apart.

Paramount’s market capitalization is around $15 billion, a fraction of the size of the company it is trying to acquire, making its financing a crucial aspect of its bid.

Paramount has told investors that the Ellison family trust has more than $250 billion in assets, including roughly 1.16 billion shares of Oracle, which Larry Ellison helped found. Paramount noted the trust had been involved in other deals involving public companies.

Paramount has said it was “absurd” to suggest that the family is not good for the money. Its proposed deal with Warner Bros. Discovery includes a provision giving it the ability to sue Paramount to make sure it follows through on the deal, though such provisions have limitations. Paramount has also lined up $54 billion in debt from firms including Bank of America, Citigroup and Apollo Global Management.

Warner Bros. Discovery’s deal with Netflix prohibits it from soliciting other offers. But Paramount could decide to raise its bid and present it to Warner Bros. Discovery.

If Warner Bros. Discovery chooses another bidder, it would owe Netflix a $2.8 billion fee. Netflix could also revise its offer to counter additional bids from Paramount.

Paramount could also urge Warner Bros. Discovery shareholders to vote against the Netflix deal. Analysts do not expect a shareholder vote to happen before April.

Hanging over a deal with either Netflix or Paramount is how regulators will respond. President Donald Trump, whose administration must approve of any deal, has said that he plans to play a role in any decision.

Warner Bros. Discovery said Wednesday its board did not believe there was a “material difference” in the risks the Paramount and Netflix deals face in being approved in the United States and abroad. It added that Netflix had agreed to pay a $5.8 billion fee if the deal gets blocked by regulators, which is more than than the $5 billion that Paramount has offered.

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This article originally appeared in The New York Times.

By Lauren Hirsch and Brooks Barnes/Aleksey Kondratyev
c. 2025 The New York Times Company