Paramount's proposed acquisition of Warner Bros. Discovery has been hit with another legal challenge—this time from one of its own shareholders.
According to Variety, a lawsuit filed in Delaware Chancery Court accuses Paramount Skydance CEO David Ellison and Oracle co-founder Larry Ellison of securing federal approval for the company's planned $111 billion Warner Bros. Discovery acquisition through what the complaint describes as an "illegal" arrangement with the White House. The shareholder is seeking to block the merger and recover unspecified monetary damages.
According to the complaint, the alleged agreement included promises intended to ease regulatory hurdles related to the transaction. Among the claims are allegations that the Ellisons offered "illegal private benefits" to President Donald Trump, including "the opportunity to improperly funnel cash" by resolving legal claims involving CNN and assurances that certain CNN anchors would be removed following the merger.
Trump is not named as a defendant in the lawsuit.
Paramount sharply rejected those allegations. "This lawsuit recycles allegations that have already been reported and already addressed," a Paramount spokesperson said in a statement. "No commitments from either David or Larry Ellison have been made to any government body, State AG, or federal agency regarding the future of CNN or any other news property, other than the goal to deliver truth-based journalism."
The company added that "The Warner Bros. Discovery transaction stands on its own merits," arguing the combination would provide "greater investment in original programming, a stronger competitor to streaming rivals, and a more durable footing for journalism and storytelling alike."
The shareholder suit lands just one day after 12 state attorneys general, led by California Attorney General Rob Bonta, sued to stop the merger on antitrust grounds. Those states argue the combination would reduce competition, eliminate jobs, increase prices for consumers, and concentrate too much power within the entertainment industry.
The latest lawsuit also revisits issues that have persisted throughout the bidding process. Paramount ultimately prevailed over Netflix, which initially agreed to purchase Warner Bros. Discovery's studio and streaming assets before declining to match Paramount's final offer. Netflix exited the process with a $2.8 billion breakup fee, allowing Paramount to move forward with the acquisition.
Since then, the transaction has cleared review by the U.S. Justice Department and received approval from Warner Bros. Discovery shareholders. It has also faced scrutiny over billions of dollars in financing from Middle Eastern sovereign wealth funds, though Paramount has maintained that those investors will hold neither voting rights nor board representation.
The shareholder complaint argues that the merger, as currently structured, exposes Paramount investors to long-term legal and regulatory risk. It contends that future administrations could revisit the transaction and that the court should prevent company leadership from "profiting from an illegal bribery scheme."
