Warner Bros. Discovery Shareholders Approve Paramount Takeover

Warner Bros. Discovery shareholders voted overwhelmingly on Thursday to approve the company’s sale to Paramount Skydance, moving a deal valued at about $110 billion, or nearly $111 billion including debt according to the AP, closer to completion, the Associated Press, NBC News and NPR reported. Disclosure: CBS News is owned by Paramount.

Paramount is paying $31 a share, which values Warner Bros. Discovery at roughly $77 billion, NBC News reported. The AP put the merger’s value at $81 billion. The combined company would bring together two of Hollywood’s five legacy studios, the HBO Max and Paramount+ streaming services, and CBS and CNN. Warner Bros. Discovery CEO David Zaslav called the vote “another key milestone,” according to NBC News. The company has said it expects to close in its third fiscal quarter, the AP reported. NPR’s Mandalit del Barco said the virtual meeting lasted about 10 minutes and that shareholders also voted to rebuke executive pay.

The deal still needs approval from antitrust regulators at the Justice Department, and California Attorney General Rob Bonta’s office is investigating and could bring a separate challenge, NBC News reported. The head of the department’s antitrust division, Omeed Assefi, told Reuters in March that Paramount will “absolutely not” get a fast track for political reasons, NBC News said.

Opposition is broad. More than 4,000 actors, directors, writers and producers signed an open letter arguing the deal would reduce competition in an industry “already under severe strain,” NBC News and NPR reported. Democratic Sens. Elizabeth Warren and Cory Booker have criticized it. Booker said at a hearing last week that the stakes involve “who controls news, who controls entertainment, who controls storytelling,” the AP reported. Warren has raised concerns about “political favoritism,” NBC News said, noting that Paramount CEO David Ellison is the son of Oracle co-founder Larry Ellison, a close ally of President Trump, and that Mr. Trump has publicly praised the family and called for new ownership of CNN.

Paramount has answered that the merger “strengthens both consumer choice and competition,” NBC News reported. Ellison has pledged to keep movies in theaters at least 45 days and release 30 films a year between the two studios, and has said Warner Bros. Pictures will operate separately, NBC News and the AP reported. NPR said the chief of AMC, the largest U.S. movie chain, has said he trusts Ellison to deliver, though some theater owners remain skeptical. Executives argue consumers would get bigger content libraries, particularly if HBO Max and Paramount+ become one service, the AP reported.

The path to this vote was not smooth. Warner’s board rebuffed Paramount’s overtures late last year to pursue a studio-and-streaming deal worth about $72 billion with Netflix, then Paramount went directly to shareholders with a hostile bid that included the cable networks Netflix did not want, the AP reported. Netflix withdrew from the contest after Paramount raised its offer, the AP reported; NBC News dated that to late February.