Paramount Skydance CEO David Ellison and his father, Oracle co-founder Larry Ellison, are being sued by a Paramount shareholder who alleges they struck an “illegal” backroom deal with President Donald Trump to help secure government approval for Paramount’s proposed acquisition of Warner Bros. Discovery.
According to Variety, the lawsuit was filed Tuesday in Delaware Chancery Court by Paramount shareholder Paul Robbins. Also named in the lawsuit are Paramount’s board of directors, who are accused of failing to prevent or disclose the alleged conduct. The plaintiff is seeking to block the merger and recover unspecified monetary damages.
Alleged Side Deal at the Center of Lawsuit
The complaint alleges that David and Larry Ellison “reportedly promised illegal private benefits to President Trump” in an effort to streamline approval of the merger. According to the lawsuit, those alleged benefits included reshaping CNN’s editorial direction and firing anchors the president dislikes.
President Donald Trump speaks at CPAC in 2017 – YouTube, The New York Times
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The complaint goes even further, arguing that once Paramount’s acquisition of Warner Bros. Discovery is completed, David and Larry Ellison “also have the opportunity to improperly funnel cash to President Trump by settling litigation he brought against CNN in his personal capacity prior to his reelection.”
According to the lawsuit, these alleged agreements place Paramount shareholders’ investments at risk.
“The Ellisons’ actions not only harm the reputations of the news outlets they currently own, which are hemorrhaging viewers, but they are latent liabilities waiting to be triggered by a future administration, at either the state or federal level, or by consumers or other private litigants that will enforce the law against Paramount and its disloyal fiduciaries.”
The lawsuit also notes that despite significant investments from the sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates, Paramount’s proposed merger with Warner Bros. Discovery does not appear to be under review by the Committee on Foreign Investment in the United States (CFIUS).
Paramount has argued that such a review is unnecessary because the foreign investors will not receive board seats or voting rights.
Paramount Denies the Allegations
Paramount strongly denied the accusations.
In a statement provided to the press, the company described the lawsuit as recycling allegations that have already been publicly addressed.
David Ellison in an interview with Bloomberg – YouTube, Bloomberg Podcasts
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“The complaint recycles the same false allegations and conspiracy theories that have already been disproven,” Paramount said, adding that no commitments regarding news coverage or editorial decisions were made while pursuing the Warner Bros. Discovery transaction.
The lawsuit follows months of political scrutiny surrounding Paramount’s bid to acquire Warner Bros. Discovery.
Critics have questioned whether David Ellison’s relationship with President Trump and Larry Ellison’s longstanding political ties created the appearance of favoritism during the federal review process. Those concerns intensified after reports claimed the elder Ellison discussed possible changes at CNN while seeking government approval for the merger—allegations Paramount has consistently denied.
Another Challenge for the Merger
The shareholder lawsuit is only the latest obstacle facing Paramount’s proposed acquisition.
Earlier this week, a coalition of 12 states led by California filed a separate lawsuit seeking to block the merger on antitrust grounds, arguing that combining Paramount and Warner Bros. Discovery would reduce competition throughout the entertainment industry and ultimately harm consumers.
Paramount Pictures Logo – YouTube, ClosingLogosHD
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Paramount has maintained that the merger would strengthen its ability to compete with streaming giants while preserving investment in theatrical films and television production.
With litigation now coming from both state governments and one of Paramount’s own shareholders, the company faces mounting legal pressure as it works to complete one of the largest media mergers in recent history.
Do you think this lawsuit presents a significant legal hurdle to the merger? Sound off and let us know!
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