Warner Bros. Discovery Shareholders Approve Paramount Merger Amid Executive Pay Controversy

Warner Bros. Discovery (WBD) shareholders voted overwhelmingly to approve Paramount Skydance's $111 billion acquisition of the media company during a special virtual meeting. The deal, which includes significant assets such as HBO Max, Warner Bros. film studios, and CNN, is seen as a major reshaping of Hollywood. Shareholders will receive $31 per share, representing a 147% premium over the company's stock price a year ago. This approval marks a critical step toward finalizing the merger, which is still pending regulatory approvals from the U.S. Department of Justice and European authorities.

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Despite the approval of the merger, shareholders expressed discontent regarding the proposed compensation packages for WBD executives, particularly CEO David Zaslav. A majority voted against Zaslav's exit package, which could total over $887 million, including $34.2 million in cash severance and $517.2 million in equity. This advisory vote is non-binding, meaning the board can proceed with the payouts as planned. Institutional Shareholder Services (ISS) had recommended a "no" vote on the compensation due to concerns over "problematic" tax reimbursements and the overall size of the packages.

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The merger has faced significant opposition from various stakeholders, including Hollywood unions, actors, and advocacy groups. Over 4,000 individuals, including notable figures like Ben Stiller and J.J. Abrams, signed an open letter urging state attorneys general to block the deal, citing fears of massive layoffs and reduced programming quality. Critics argue that the consolidation would diminish competition in an already concentrated media landscape, potentially leading to higher prices and fewer choices for consumers.

LA Times

Senator Elizabeth Warren has been vocal in her opposition, stating that the merger is not finalized and that state attorneys general are prepared to take legal action against it. Concerns have also been raised about the potential political implications of the merger, particularly regarding the influence of the Ellison family, known for their ties to former President Donald Trump.

The Guardian

The merger is expected to close by the third quarter of 2026, pending regulatory approval. Paramount has committed to achieving $6 billion in cost savings through the merger, which may involve significant layoffs across the combined companies. The deal is backed by substantial financing, including $54 billion in debt commitments from major financial institutions.

The Wrap

In summary, while the merger between Warner Bros. Discovery and Paramount Skydance has received shareholder approval, it faces significant scrutiny and opposition that could impact its finalization. The outcome of regulatory reviews and potential legal challenges will be crucial in determining the future of this landmark deal.

CNBC

WBD Chairman Samuel A. Di Piazza Jr. stated, “We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio.” David Zaslav remarked, “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders.”

Variety Magazine

• “The Paramount-Warner Bros. merger isn’t a done deal,” — Senator Elizabeth Warren, U.S. Senator

Variety Magazine

• “Today, Warner Bros Discovery shareholders voted for their short-term financial gains, not for the public good,” — Craig Aaron, Co-CEO of Free Press

The Guardian

• “This transaction would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries — and the audiences we serve — can least afford it,” — Michele Mulroney, President of the Writers Guild of America West

Hollywood Reporter

• “Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros.” — Paramount Skydance spokesperson

Hollywood Reporter

While the shareholder vote was overwhelmingly in favor of the merger, the exact vote count has not been disclosed. Additionally, the potential for state attorneys general to file lawsuits against the merger remains uncertain, with varying opinions on the likelihood of successful legal challenges.

The Guardian