In this articleCMCSANFLXWBDPSKYFollow your favorite stocksCREATE FREE ACCOUNTA bus passes near Warner Bros. Studio on Sept. 12, 2025 in Burbank, California. Mario Tama | Getty ImagesParamount Skydance is calling foul on how Warner Bros. Discovery has conducted its sale process. In a letter reviewed by CNBC, Paramount attorneys told Warner Bros. Discovery CEO David Zaslav that Paramount was questioning the “fairness and adequacy” of the process, which officially launched in October. This week, Paramount, Netflix and Comcast submitted second-round bids to acquire some or all of Warner Bros. Discovery’s assets, CNBC previously reported. “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,” reads the letter from attorneys at Quinn Emanuel. “We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.”In particular, Paramount’s letter calls out reports that WBD’s management appears to favor Netflix’s offer. Netflix has made an offer of mostly cash, and all three companies submitted higher bids than their initial offers, according to people close to the matter who declined to be named speaking about confidential dealings. As of Thursday morning, Netflix was the leading bidder based on how WBD is valuing the offers, people familiar told CNBC. Comcast executives, for their part, continue to be disciplined in the company’s offer as to not anger shareholders by taking on additional debt and risking its balance sheet, according to people familiar with that company’s thinking. Comcast leadership has previously said that its bar for M&A is generally high.Warner Bros. Discovery told CNBC it confirmed to Paramount that it had received the letter and would share it with members of the WBD board. “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,” the company said in its response to Paramount. WBD expects to announce a winner as early as next week, sources told CNBC. While first-round bids arrived in mid-November, Paramount has been vying to acquire the entirety of Warner Bros. Discovery — which includes its streaming service HBO Max, film studio Warner Bros. and portfolio of cable TV networks like TNT and TBS — since September, CNBC previously reported. Warner Bros. Discovery rebuffed three offers made by Paramount, the last of the those for $23.50 a share, before launching a formal sale process to beckon other buyers, CNBC previously reported. Netflix and Comcast are interested only in WBD’s streaming and film studio business, CNBC has reported. Prior to the sale process Warner Bros. Discovery had begun the process of splitting its company into two — Warner Bros., the streaming and studio businesses which would be led by Zaslav, and Discovery Global, the cable TV networks division that would be run by current WBD CFO Gunnar Wiedenfels. Paramount attorneys sent the letter as the company suspects that Zaslav has been biased against a merger with Paramount since the outset, and instead, would rather complete its path toward a separation, some of the people familiar told CNBC. Paramount and its advisors have viewed WBD’s contact with them as more obstructionist rather than constructive, two of the people said. Prior to the sale process, Zaslav had been known to tell colleagues that Amazon’s Prime Video or Netflix would likely be interested suitors in Warner Bros. Discovery, or specifically HBO Max and the film studio, the people said. In the letter, Paramount asks the WBD board if reporting that WBD management has “chemistry” with Netflix management is accurate. Paramount is seeking confirmation, according to the letter, of whether Warner Bros. Discovery appointed an independent special committee of disinterested members of its board to steer the sale process and consider offers. “If not, we strongly urge you to empower such a special committee comprised of directors with no potential appearance of bias or beholdenness to others whose interests may differ from those of the stockholders,” the letter reads. “This would seem to be an important step at this stage, to ensure the fairness and unimpeachability of the transaction process and to maximize the value of whatever outcome WBD determines to pursue.”Read the full letter from Paramount to WBD: 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.We have recently seen reporting in the U.S. and foreign media that gives serious cause for concern. The German newspaper Handelsblatt recently reported on a meeting that reportedly took place in Brussels between Gerhard Zieler, President of WBD’s International Business and a direct report to WBD’s Chief Executive Officer, who “arrived with a three-person team,” with the E.U. Commission Vice President Hena Virkkunen, to discuss the potential merger prospects for WBD. In that conversation, the article reports that “concerns were raised that the Ellison family’s planned acquisition of Warner Bros. Discovery could lead to excessive media concentration,” and that the E.U. Commission would consider intervening in a potential merger with Paramount for this reason. The article quotes “sources close” to Zeiler as saying “that the talks with the Commission were important because both Warner and the EU wanted to preserve media diversity.” 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.While this report is concerning in itself, this is not an isolated report regarding purported WBD resistance to a combination with Paramount. 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 betw …
