Paramount investor sues Ellisons over alleged Trump deal in WBD merger

Paramount shareholder sued Paramount Skydance chief David Ellison and billionaire Larry Ellison, alleging they secured regulatory approval for the company's proposed Warner Bros. Discovery takeover through an "illegal" side deal with US President Donald Trump.

Variety reported the lawsuit, filed in Delaware Chancery Court on Tuesday, seeks to block Paramount's proposed $111 billion acquisition of Warner Bros. Discovery and demands unspecified monetary damages.

The complaint alleges the Ellisons offered "illegal private benefits" to Trump in exchange for removing federal regulatory hurdles to the merger.

Lawsuit alleges promises linked to CNN

According to the complaint, the alleged arrangement included helping settle Trump's legal claims against CNN and promising changes at the network after the merger, including the dismissal of certain CNN anchors the president dislikes.

The lawsuit claims the alleged actions could expose Paramount to long-term legal and reputational risks under future administrations.

Paramount rejects allegations

Paramount denied the accusations, saying the lawsuit repeats claims that have already been addressed.

A company spokesperson said no commitments had been made to any government agency regarding CNN or any other news outlet beyond the company's stated goal of delivering "truth-based journalism."

The spokesperson added that the Warner Bros. Discovery transaction stands on its own merits and would provide consumers with greater choice, stronger investment in original programming and a more competitive media company.

Fresh challenge to proposed merger

The shareholder lawsuit comes days after 12 Democratic state attorneys general filed an antitrust suit seeking to block the merger, arguing it would give the combined company excessive market power. The Writers Guild of America has also launched a separate legal challenge.

The complaint further claims the Justice Department approved the deal without requiring divestitures despite objections from some career officials, while alleging the transaction received limited regulatory scrutiny despite substantial backing from Middle Eastern sovereign wealth funds.

Trump is not named as a defendant in the lawsuit.

The case names David Ellison, Larry Ellison and several Paramount Skydance board members as defendants, arguing they breached their fiduciary duties by pursuing the merger under its current structure.