Paramount sues Warner Bros. over its Netflix deal

David Ellison's Paramount has sued Warner Bros.

- BY MEG JAMES

TED SARANDOS, co-chief executive of Netflix, left, and David Zaslav, CEO of Warner Bros. Discovery, were on friendly terms at the Golden Globes on Sunday.

(ALLEN J. SCHABEN Los Angeles Times)

Discovery — the smaller firm’s latest move to block Warner's $72-billion sale to Netflix.The lawsuit, filed Monday morning in Delaware court, asks Warner and its chief executive, David Zaslav, to produce more information about Warner's deliberations and decision to select Netflix, ending the hotly contested auction on Dec. 4.

Last week, Warner's board unanimously rejected Paramount's $30-a-share proposal that included a personal guarantee by Ellison’s father, the tech billionaire Larry Ellison, to cover the equity portion of Paramount’s deal.

Paramount Skydance is waging a hostile takeover, asking Warner investors to sell their shares to Paramount.

Its lawsuit contends that Warner's board breached its disclosure duties “by failing to provide full, accurate, and truthful information” to investors. Paramount, however, stopped short of asking the court to block the Netflix deal.

Instead, Paramount said it was simply seeking access to information to allow shareholders to evaluate the competing offers — Paramounts or Netflix’s — “while reserving the right to seek further relief as appropriate.”

Separately, David Ellison said Paramount was preparing a proxy fight and would nominate its own slate to serve as Warner's board.

The move came the morning after the Golden Globes ceremony in Beverly Hills, in which Zaslav's warm relations with Ted Sarandos, Netflix’s co-chief executive, were on display. Both Warner Bros. Discovery and Netflix had a strong night at the award show, which was televised by Paramount’s CBS network.