Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery is facing yet another legal challenge, as shareholders have sued David Ellison and his father, Oracle co-founder Larry Ellison, alleging they struck an undisclosed deal with President Donald Trump to help win approval for the blockbuster media merger.
The lawsuit, filed Tuesday on behalf of Paramount shareholders, alleged the Ellisons entered into an undisclosed agreement to overhaul CNN to better align with the Trump administration’s views on news media in exchange for political support for the transaction. The suit characterized the alleged arrangement as a “corrupt” side deal that was never disclosed to investors.
According to the lawsuit, the alleged agreement exposed the company to legal and financial risks while breaching fiduciary duties owed to shareholders.
Paramount denied that any promises or deals were made to the Trump administration or any governing body.
“This lawsuit recycles allegations that have already been reported and already addressed. As we’ve said consistently: 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,” a spokesperson for Paramount told TheWrap. They added that, as they stated in the summer of 2025 regarding the acquisition, “throughout its history and during the review of the proposed acquisition of Paramount, Skydance has fully complied with all applicable laws, including our nation’s anti-bribery laws.”
“The Warner Bros. Discovery transaction stands on its own merits,” the spokesperson added. “Combining these two libraries and platforms gives consumers more choice, not less — greater investment in original programming, a stronger competitor to streaming rivals, and a more durable footing for journalism and storytelling alike. We remain confident in the merger’s fundamentals and will continue toward closing.”
The shareholder lawsuit is the latest legal challenge surrounding the proposed merger. Earlier this week, a coalition of 12 state attorneys general led by California Attorney General Rob Bonta sued to block the transaction on antitrust grounds, claiming it would reduce competition across the film, TV and streaming industries. The Writers Guild of America has also filed a separate lawsuit challenging the deal.
Unlike those cases, which focus on the merger’s competitive effects and its impact on workers, the shareholder complaint centers on the Ellisons’ alleged conduct during the approval process and whether investors were legitimately informed of developments related to the transaction.
If completed, the merger would combine two of Hollywood’s biggest entertainment companies, bringing together Warner Bros. Pictures, HBO, HBO Max, CNN, CBS, Paramount Pictures, Paramount+ and dozens of Paramount-owned cable networks under a single corporate umbrella. Supporters of the deal have long argued the combined company would be better positioned to compete with streaming giants including Netflix, Disney and Amazon, while critics feel the merger would further consolidate media ownership and reduce competition.
The lawsuit adds another layer of uncertainty to a transaction already facing multiple legal and regulatory hurdles as Paramount works toward completing the deal.
