Explosive Lawsuit Rocks Hollywood: Ellison Billionaires Sued Over Alleged Trump Deal in Warner Bros. Takeover Bid

A Paramount shareholder has filed a lawsuit in Delaware Chancery Court, alleging an "illegal" deal between Paramount Skydance chief David Ellison, his father Larry Ellison, and former President Donald Trump. The suit seeks to block Paramount's proposed $111 billion merger with Warner Bros. Discovery (WBD) and demands unspecified monetary damages. The core of the complaint revolves around allegations that the Ellisons promised "illegal private benefits to President Trump" to ensure U.S. governmental approval for the WBD takeover, thereby removing federal regulatory barriers.

According to the lawsuit, these alleged private benefits included offering Trump "the opportunity to improperly funnel cash" by settling his legal claims against CNN. Furthermore, the Ellisons reportedly promised that CNN anchors disfavored by Trump would be fired following the WBD acquisition. The shareholder, Paul Robbins, argues that such actions not only damage the reputations of news outlets currently owned by the Ellisons, which are already experiencing declining viewership, but also create significant "latent liabilities" for any future administration.

This shareholder lawsuit follows closely on the heels of other legal challenges against the proposed merger. Just a day prior, 12 Democratic state attorneys general filed a federal lawsuit on antitrust grounds, contending that the combined Paramount-WBD entity would gain undue control over theatrical and cable TV markets. Additionally, the Writers Guild of America (WGA) has also sued to prevent the merger, expressing concerns that it would negatively impact writers' pay and job opportunities.

The complaint further details that since the Paramount-Skydance deal concluded in August 2025, the Ellisons allegedly "proceeded to remake CBS in the president’s image, bought properties he enjoyed, and even hosted events to honor him," actions the suit claims "helped the Ellisons, but it appears to have hurt Paramount." Larry Ellison is noted as a primary financial backer of both the initial Paramount Global deal and the current Warner Bros. takeover.

A key point of contention in the lawsuit is the U.S. Justice Department's swift approval of the Paramount-WBD acquisition in mid-June. This approval came without imposing any requirements for divestitures or other concessions, despite objections from lower-ranking lawyers within the department who were reportedly inclined to challenge the deal, as per a Wall Street Journal report. The lawsuit suggests that federal regulators adopted a a "conspicuously hands-off approach" to reviewing the merger after Trump indicated his preference for Paramount acquiring WBD over a competing offer from Netflix.

The lack of scrutiny extends to the U.S. Committee on Foreign Investment in the United States (CFIUS). The complaint highlights that there has been no indication of a CFIUS review, despite Paramount securing $24 billion from the sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates. These Middle Eastern funds are slated to own 38.5% of the combined Paramount-Warner Bros. Paramount has previously stated that foreign investors backing the WBD bid would not hold board seats or voting shares, thus arguing that a CFIUS review is not warranted. However, the shareholder lawsuit asserts that this lack of oversight introduces substantial risk for Paramount investors, predicting that future presidential administrations would likely subject such an ownership structure to "intense and persistent scrutiny," thereby creating "significant long-term exposure for Paramount."

Paul Robbins, the lead plaintiff, is represented by Thomas Law, Public Integrity Project, and Freedom of the Press Foundation. Seth Stern, chief of advocacy at the Freedom of the Press Foundation, stated that the merger's economic terms already make "no sense for Paramount shareholders," and even less so given the alleged commitments to Trump that could "tank CNN’s reputation and viewership just like they did at CBS." Brendan Ballou, CEO of the Public Integrity Project, condemned the situation, stating, "America’s richest people want to turn America’s most important media outlets into propaganda machines for the president. This is bad for Paramount’s shareholders. This is bad for democracy. And this is deeply corrupt. This case is about exposing and stopping that corruption."

The lawsuit is a stockholder derivative action against David and Larry Ellison for alleged breaches of their fiduciary duty of loyalty as controlling stockholders, and against David Ellison as CEO and chairman of Paramount Skydance for similar breaches as a director. It also targets the entire Paramount Board, seeking to prevent them from closing a merger transaction that, as configured, would allow fiduciaries to profit from an "illegal bribery scheme" in violation of Delaware corporate law. Plaintiff Paul Robbins has continuously been a Paramount stockholder since before the August 7, 2025, combination of Paramount Global and Skydance.