Ellison’s Hardball Warner Bros. Tactics Gave Netflix an Opening: Bloomberg

On the night of Dec. 3, lawyers from Quinn Emanuel Urquhart & Sullivan sent a letter to Warner Bros. Discovery Inc. raising “serious concerns about the fairness and adequacy” of the company’s sale process.

Warner Bros. CEO David Zaslav and his advisers were taken aback by Paramount's legal team having cited “serious concerns about the fairness and adequacy” of the former's sale process. (Photo: Warner Bros. Discovery)

Their client, David Ellison — chairman and CEO of Paramount Skydance Corp. — had been pursuing Warner Bros. for months and feared the deal was slipping away, Lucas Shaw reported for Bloomberg.

Warner Bros. CEO David Zaslav and his advisers were taken aback.

They believed they had run a fair process, noting that Zaslav had met or spoken with Ellison at least six times over the previous two months.

Earlier that day, Paramount’s team had indicated it would submit a revised proposal. Instead, Warner Bros. received a legal threat.

Within hours, members of Ellison’s inner circle realized the letter had been a mistake. Some were unaware it was being sent, according to people familiar with the matter.

Ellison’s advisers later contacted their Warner Bros. counterparts, calling the letter “unhelpful,” according to a filing.

The following morning, Paramount submitted its sixth revised offer, and Ellison texted Zaslav about the bid.

When Zaslav did not respond, Ellison sent a follow-up message expressing admiration and a desire to partner. Zaslav again did not reply. By that evening, the Warner Bros. board had decided to sell its namesake studio and HBO Max streaming business to Netflix Inc.

For months, Ellison’s pursuit of Warner Bros. had appeared inevitable.

But Paramount’s disorganized, last-minute maneuvers were among several missteps that weakened its position and opened the door for a rival.

Netflix, the Silicon Valley disruptor that reshaped the entertainment industry over two decades, ultimately agreed to acquire one of Hollywood’s oldest and most storied studios.