Shareholders of Warner Bros. Discovery (WBD) voted to sell the company to David Ellison’s Paramount Skydance for $31 a share in a virtual meeting today. This vote was crucial for moving the deal forward.
During the meeting, WBD officials noted the merger passed with strong approval. However, shareholders rejected a proposed compensation package for CEO David Zaslav that could exceed $500 million. This vote won’t stop him from collecting the payout, as it is non-binding.
The mega-merger, announced on February 27, sets WBD’s equity at $81 billion and its total value at $110 billion. WBD board chairman Samuel A. Di Piazza, Jr. expressed gratitude for shareholder support, stating the company looks forward to a successful collaboration with Paramount that will enhance entertainment options for the audience.
Zaslav described the vote as a significant step towards this historic transaction, promising it would bring great value to shareholders. If all goes as planned, Paramount expects the deal to close by the third quarter of 2026, pending regulatory approval. There’s a “ticking fee” that WBD shareholders could earn $0.25 per share for each quarter until the merger closes.
The deal is under scrutiny from the U.S. Department of Justice and European regulators. There are concerns that it might face legal challenges, especially with California’s Attorney General possibly preparing a case against it. Recently, state AGs have succeeded in temporarily halting other big mergers, showcasing their growing influence.
Critics worry about job losses and the impact of merging two major studios. David Ellison argues that the deal is beneficial for Hollywood and aims to increase creative opportunities. The Ellison family, including Oracle co-founder Larry Ellison, has close ties to political figures.
Funding for the merger comes from a mix of equity and debt—$47 billion in equity and $49 billion in debt. Some of the debt has earned junk status from major ratings agencies, raising concerns about the financial stability of the combined entity.
Historically, Paramount pursued WBD even when it wasn’t up for sale, leading to a public auction. After several rejected offers, WBD ultimately chose Paramount’s offer over a competing bid from Netflix.
The pushback against the merger has been strong. On the eve of the shareholder vote, Senator Cory Booker released a video highlighting worries about potential risks, such as job cuts and threats to content diversity. A notable open letter from Hollywood figures gathered over 3,000 signatures, emphasizing the dangers of media consolidation.
Michael O’Leary, head of CinemaUnited, voiced strong opposition during a recent conference, while AMC Entertainment’s CEO expressed support for Ellison. Ellison has assured theater owners of increased content expenditure, showcasing his commitment to the industry.
As conversations about media consolidation grow, experts are watching closely. The outcome of this merger could reshape the landscape of entertainment, affecting everything from jobs to content distribution.
For more details on the regulatory aspects and public opinions surrounding this merger, check out reports from sources like The Hollywood Reporter or the latest updates from the U.S. Department of Justice.
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