Paramount Skydance CEO David Ellison PATRICK T. FALLON/AFP/Getty Images Share on Facebook Share on X Google Preferred Share to Flipboard Show additional share options Share on LinkedIn Share on Pinterest Share on Reddit Share on Tumblr Share on Whats App Send an Email Print the Article Post a Comment In a notable turn for the sale of the Warner Bros. empire, David Ellison's Paramount has issued a letter to the board of the studio it hopes to acquire questioning if the David Zaslav-led company is overseeing "a tilted and unfair process." Warner Bros. Discovery lawyers have replied to the letter, in a note viewed by The Hollywood Reporter, deflecting concerns and saying, "Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so." Related Stories Movies Jon M. Chu Inks First-Look Deal With Paramount Movies Treasury Secretary Scott Bessent Deflects Questions About Trump's Push for 'Rush Hour 4' The note from Paramount, reportedly sent via its attorneys at Quinn Emanuel, seems to suggest that it believes Netflix has been receiving more favorable treatment so far in the bidding process. Second round bids to acquire Warner Bros. Discovery were due on December 1, and Paramount, Comcast and Netflix have all upped the ante to make offers after initial bids were collected on November 20. Netflix is seen as interested in acquiring the studio and streaming business (the Warner Bros. studio, HBO and HBO Max), whereas Paramount is aiming for an outright acquisition that includes the cable channels division (TNT, TBS, CNN, HGTV and Food Network) as well. Comcast's latest bid would see it spin out NBCUniversal into Warner Bros. Discovery in what would likely be a stock-heavy transaction. "Several U.S. media outlets have reported on the enthusiasm by WBD management for a transaction with Netflix, and on statements by management that a transaction between WBD and Netflix would be a 'slam dunk,' while also referring to Paramount's bid in a negative light," read the Paramount letter, which CNBC published in full. "Additional reporting since the submission of revised bids on December 1 has indicated that WBD's 'board has really warmed to' a transaction with Netflix due to the 'chemistry between' WBD management and Netflix management." Regulatory concerns appear to be a critical factor in any potential deal. Paramount reportedly upped its potential breakup fee to $5 billion in its latest offer, underscoring how it believes it has the best path to get through regulators, though the letter to WBD suggested that European Union regulators may be taking a tougher stand on the deal. A megadeal by Ellison's Paramount to acquire Warner Bros. Discovery in whole would "not come without risk," a Bank of America research team led by Jessica Reif Ehrlich wrote on Nov. 26. Paramount Skydance is "already levered at nearly 3.5x prior to funding a $70bn-$75bn equity purchase price and assuming $25.6bn in WBD net debt as of late next year." The Paramount bid for Warner Bros is backed in part by the assumption that Oracle founder Larry Ellison (net worth: $266 billion) would be a backstop in the deal to help boost his son's bid. David Ellison is only months removed from closing an $8 billion merger of his Skydance Media with Paramount in August. Paramount's letter also appeared to suggest that Warner Bros. management may be finding more favorable options for post-sale employment with other suitors. "Paramount has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management's potential personal interests in post-transaction roles," the letter read. While no names were named, it's understood that Zaslav isn't necessarily looking to exit his C-suite perch, and chatter has centered on what role he may have at a post-transaction combo company. Paramount, in its earlier conversations with WBD, offered Zaslav a co-CEO and co-chairman position, though it is not clear what exactly that would entail. Comcast, meanwhile, has proposed a deal that would merge NBCUniversal into WBD, a structure that would likely see Zaslav retain a senior leadership role (Zaslav, it's worth noting, spent much of his formative career at NBC). Zaslav, of course, will also have to navigate WBD though whatever regulatory process it has to deal with, a process that could take years. A source notes that with the WBD board leading the sale talks, it would be extremely unusual for any proposal to include a formal role for the current CEO (the board is focused on maximizing returns for shareholders, while also navigating potential regulatory hurdles). The entire WBD board will also need to unify on a deal, and they are less interested in what he does next. In other words, the best deal should win, regardless of what Zaslav's future could hold. The Trump Department of Justice, meanwhile, is report