Warner Bros. Discovery and Skydance Paramount Merger Moves Forward
While shareholders voted unanimously to approve the Warner Bros. Discovery and Paramount Skydance merger last week, the deal still has a lot of roadblocks in its way. Read on for the details of this proposed merger, including the next steps in the process.
Warner Bros Discovery and Paramount Skydance Merger Clears Major Hurdle
Shareholders of Warner Bros. Discovery (WBD) voted in large support of a plan to merge with Paramount Skydance, the parent company of CBS News. The Thursday vote is just one step in a long process to finalize the $110 billion merger. The merger still requires approval from the government.
Although the shareholders voted "overwhelmingly" to move forward, the voters decided against the proposed compensation packages for WBD executives. This included a proposed $550 million payout to outgoing WBD chief executive David Zaslav.
The vote by the shareholders was not a surprise. The boards of both companies had already approved the merger, encouraging the shareholders to do the same.
Zaslav lauded the decision, saying that the "stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders." Zaslav went on to say that WBD "will continue to work with Paramount to complete the remaining steps in this process that will create a leading, next-generation media and entertainment company.”
A spokesperson for Paramount Skydance echoed Zaslav's enthusiasm, saying that “shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across regulatory approvals."
Despite the optimism surrounding last Thursday's approval, there are still more hurdles to cross before the deal becomes final. The merger will first need to receive regulatory approval from both the U.S. Department of Justice (DOJ) and European regulatory agencies. Business analysts are also warning that there is a good chance that a coalition comprised of state attorneys general will file a lawsuit seeking to block the merger.
Should the merger be approved, WBD shareholders are set to receive $31 per share of stock. The companies believe that the merger will close between July and September.
Opponents of the Merger Speak Out
There is no shortage of opposition to the merger between the two entertainment giants. Craig Aaron, co-chief executive of the advocacy organization Free Press, said that the WBD "shareholders voted for their short-term financial gains, not for the public good." Aaron criticized the move, saying that shareholders have "opened the door to wholesale layoffs across the news and entertainment industry, more propaganda in news coverage, higher prices for consumers, and fewer choices for audiences across the United States and around the world."
Alvaro Bedoya, a former Federal Trade Commission (FTC) member, spoke during an online discussion by the American Economic Liberties Project held ahead of Thursday's vote. Bedoya said that he believes that it is likely that California Attorney General Rob Bonta will lead a lawsuit to prevent the merger from happening. According to Bedoya, the biggest question is how many other states will join California in the lawsuit. Bedoya went on to say that "this is not a done deal," noting that he thinks the merger will be blocked or undone.
Former CNN anchor Jim Acosta also participated in the online discussion. Acosta expressed his worries about the Ellison family taking over the network. David Ellison is the chief executive of Paramount Skydance. The Ellison family has long been criticized for being too friendly with the Trump administration. In addition to owning CBS News, a merger would also bring CNN into the same fold. Acosta said that he thinks there is a real danger that a propaganda network could be the result of this merger, urging shareholders to think about what is good for America.
On the political side, U.S. Senator Cory Booker conducted a hearing featuring actor Mark Ruffalo to discuss the merger. Ruffalo noted there would be a significant amount of layoffs across the media and entertainment industries should the merger materialize. While Ellison was invited to attend the hearing, he declined the invitation.
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