Paramount’s massive $110 billion deal for Warner Bros. Discovery got the green light from WBD shareholders Tuesday morning, as they voted to approve a merger that will combine two legacy Hollywood studios.
However, shareholders rejected the lucrative compensation package offered by WBD CEO David Zaslav, sending a letter to its board in the process.
The votes are preliminary, and WBD is expected to release more complete results at a later date. The company secretary said when announcing the preliminary results that shareholders voted “overwhelmingly” to approve the merger.
With shareholder approval secured, Paramount, led by CEO David Ellison, only needs to clear the remaining regulatory hurdles (particularly in Europe) to complete the deal.
The merger will reshape Hollywood, bringing together Warner Bros. and Paramount Cinema under one roof, combining streaming services HBO Max and Paramount+, creating what will be the largest provider of linear TV channels in the country, including CBS, TNT, TBS, CNN, HGTV, MTV, Comedy Central, Nickelodeon and many more.
WBD shareholders met virtually on Thursday to vote on the deal.
The only other item on the agenda was an advisory vote on executive compensation, with WBD’s top executives set to receive nine-figure bonuses when the deal closes. Institutional Shareholder Services, an influential proxy advisory firm, has urged a “no” vote on WBD CEO David Zaslav’s pay package, which will see him pocket between $550 million and $886 million, depending on a number of factors.
“The value disclosed in CEO Zaslav’s golden parachute table of more than $886 million represents one of the highest golden parachute estimates ever observed,” ISS wrote of the “extraordinary” package.
Shareholders appear to reject the rich pay package in a major rebuke, although it is a non-binding advisory vote, meaning the company does not have to make any adjustments if it does not want to. However, companies often adjust pay packages voluntarily after shareholders reject them.
“Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” Zaslav said in a statement. “Today’s shareholder approval is another key milestone toward the completion of this historic transaction that will provide exceptional value for our shareholders. We 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.”
Ellison framed the deal as boosting competition in a larger battle against tech giants like Amazon and Apple, not to mention Netflix, the dominant player in subscription streaming.
He has committed to releasing at least 30 films a year in theaters with a minimum of 45 days, and continuing to be a buyer and seller of television series. HBO Max and Paramount+ will be combined, but he promised to keep HBO operating independently as a studio.
But the deal has drawn strong skepticism from many prominent Hollywood players, who worry that the merger will mean fewer opportunities. This was demonstrated in a letter signed by thousands of Hollywood notables.
“This deal will strengthen an already concentrated media landscape, reducing competition at a time when our industries — and the audiences we serve — cannot afford it,” the letter said.
Democrats in Washington are targeting the deal not only because it would merge CBS News and CNN, two of the nation’s largest television news outlets, but also because of the acquiescence of President Donald Trump and his administration.
Senator Elizabeth Warren, a critic of the deal, wrote after the vote that it was “not a done deal” and that state attorneys general were “intensifying their efforts to stop this antitrust debacle.” However, the clock is ticking for meaningful action by state prosecutors.
“Shareholder approval represents another important milestone toward completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt partnership and progressing through regulatory approvals,” a Paramount Skydance spokesperson said Thursday after the vote results were announced. “We look forward to closing the transaction in the coming months and creating a next-generation media and entertainment company that better serves the creative community and consumers.”
During the special meeting, WBD Board Chairman Samuel Di Piazza Jr. framed the vote as closing the chapter on a long and tumultuous process.
“I would like to thank the WBD Board of Directors for their continued leadership and support, particularly over the past year, as we went through this strategic review process that led us to approve the merger agreement with Paramount Skydance Corporation that we are presenting to you, our shareholders, for approval today,” Di Piazza said at the opening of the meeting. “Your Board of Directors has served you, the investors, with commitment, courage and a deep sense of responsibility to create shareholder value.”
