Shareholders of Warner Bros. Discovery voted to sell the company to David Ellison’s Paramount Skydance for $31 a share in cash at a special virtual meeting Wednesday morning. The approval was a key hurdle in advancing the deal.
Company officials at the meeting said the merger vote passed “overwhelmingly,” with exact vote totals to be confirmed. Compensation for CEO David Zaslav related to the deal, which will exceed $500 million and could soar to $800 million depending on several variables, was rejected by shareholders. The pay vote is non-binding, meaning Zaslav will still be able to collect.
The controversial mega-merger announced February 27 assigned WBD an equity value of $81 billion and an enterprise value of $110 billion.
“We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio,” WBD board chairman Samuel A. Di Piazza, Jr., who presided over the meeting, said in a statement. “With Paramount, we look forward to creating an exceptional combined company that will expand consumer choice and benefit the global creative talent community.”
Zaslav called the vote a “milestone toward completing this historic transaction that will deliver exceptional value to our stockholders. We will continue to work with Paramount to complete the remaining steps in this process that will create a leading, next-generation media and entertainment company.”
Pending regulatory approval, Paramount has said it expects the transaction to close in the third quarter of 2026. The price tag would rise after that if it doesn’t. Under the terms of the deal, in the event the transaction has not closed by September 30, WBD shareholders will receive a 25-cents-a-share “ticking fee” for each quarter (measured daily) until closing.
The U.S. Department of Justice is examining the deal, as are antitrust authorities in the EU and the UK. There’s mounting speculation that California Attorney General Rob Bonta may be preparing a legal challenge. State AGs have notched some successes recently, temporarily derailing the merger of big broadcasters Nexstar and Tegna and obtaining a settlement from Live Nation.
There’s been major industry pushback against the merger, which would consolidate two major Hollywood studios and result in significant layoffs. David Ellison has repeatedly expressed confidence the deal will receive all necessary approvals and has insisted the deal is “pro-Hollywood” and a boon to the creative community. The Ellison family, led by Oracle co-founder Larry Ellison, is close to President Trump. David Ellison is hosting a dinner honoring the Trump and CBS News’ White House correspondents in Washington, D.C. tonight at the Donald J. Trump Institute of Peace.
The transaction will be being funded by $47 billion in equity, fully backed by the Ellison family and RedBird Capital. Some $24 billion of that has been secured from Middle East investors, including $10 billion from Saudi Arabia’s sovereign wealth fund. It is also backed by $49 billion of debt commitments from a group of 18 lenders led by Bank of America, Citigroup and Apollo.
The new debt, plus WBD’s existing debt ($29 billion at year end 2025), comes to almost $80 billion, a massive load, even as Ellison vows to expand investments in film, TV and technology. One key area of financial commitment will be in the film studios, with Ellison maintaining that Paramount and Warner Bros. together will release 30 films a year.
Major ratings agencies Fitch and S&P have Paramount debt at junk status as the merger undergoes final review. Moody’s has it on review for downgrade to junk. Specifically, the agencies look at leverage – or the amount of debt a company carries compared to its assets and equity.
War of Words
Paramount launched a campaign to acquire WBD last fall when it wasn’t for sale but planned to split its studio and streaming businesses and cable operations into two separate companies. Ellison made repeated offers and was repeatedly rejected, pushing WBD to open up the process with a public auction, which resulted in the WBD ultimately accepting an offer from Netflix for the studio-and-streaming unit. Paramount continued to agitate with a hostile tender offer that it extended several times before finally wooing WBD away from Netflix with that hard-to-refuse, $31-a-share cash offer. Warner’s board says it had a fiduciary duty to shareholders to accept.
The noise around the deal has been constant ever since. On Wednesday, on the eve of the shareholder vote, Sen. Cory Booker (D-NJ), put out a 13-minute video with critics warning of the ills expected to flow from the deal, including job losses, content, privacy risk and news bias.
“We are deeply concerned by indications of support for this merger that prioritize the interests of a small group of powerful stakeholders over the broader public good,” major Hollywood figures wrote in an open letter earlier this month. “The integrity, independence, and diversity of our industry would be grievously compromised.” The missive, which gathered 3,000 signatures, said, “Competition is essential for a healthy economy and a healthy democracy. So is thoughtful regulation and enforcement. Media consolidation has already weakened one of America’s most vital global industries—one that has long shaped culture and connected people around the world.”
Senate Democrats have warned David Ellison to preserve records as they threaten an investigation of Paramount’s contacts with Donald Trump over the bid.
Michael O’Leary, head of leading exhibition trade group CinemaUnited, came out strong against the merger last week in remarks at CinemaCom and most other owners of big chains oppose the deal. Adam Aron, CEO of AMC Entertainment, was an outlier, supporting Ellison. The Paramount CEO, appearing at the confab, publicly committed to a 45-day theatrical window and 90 days to SVOD.
At a series of small upfront dinners with advertisers over the past several weeks, Ellison also promised ramped up content spending.
“You can count on our complete commitment. And we’ll show you we mean it,” Ellison told theater owners.
