![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2025\/12\/GettyImages-1506832944-e1765554867612.jpg?w=2048\")
<\/p>\n<\/p>\n
Corporate-law scholars say the bidding war for Warner Bros. Discovery has become a strange kind of legal nostalgia trip, dragging Paramount back to center stage for the first time in decades Anyone who lived through the 1989 takeover that resulted in the landmark lawsuit Paramount Communications v. Time<\/em> battle hears an echo. Back then, Time Inc. was trying to merge with Warner Communications when Paramount tried to blow up the deal with a rich hostile bid for Time itself, triggering a bidding war and a landmark Delaware ruling on when, and how, boards can say no.? Of course, Time Warner emerged as a media powerhouse, reigning for decades before a 2000 tie-up with AOL that many consider to be the most disastrous merger in corporate history.<\/p>\n Anthony Sabino, a veteran legal practitioner and professor at St. John\u2019s University in Queens, N.Y., who teaches those cases, called today\u2019s fight \u201ca sequel, not a reboot,\u201d with Paramount, <\/strong>which is competing with Netflix to buy WBD, once again in the eye of a takeover hurricane. He pointed out that Paramount also fronted the 1994 Paramount v. QVC<\/em> clash\u2014also ultimately decided in Delaware\u2014where Barry Diller\u2019s QVC was rebuffed in favor of Sumner Redstone\u2019s Viacom The same brands and some of the same power players, from John Malone to Redstone\u2019s successors, are back on the call sheet, only this time the battleground is streaming instead of cable and print.? Diller himself agreed, telling The New York Times<\/em> by email earlier this week, \u201cyes, it is turning into a repeat.\u201d<\/p>\n But the rapid turn of events that saw Netflix strike a binding deal worth $72 billion in equity (and nearly $83 billion including debt), only to see Paramount go public with an all-but hostile bid worth $77.9 billion in equity (and $108 billion including debt) has also brought a cosmetics name into the conversation, famous to corporate lawyers: Revlon.<\/p>\n Named after the 1986 Delaware decision in Revlon v. MacAndrews & Forbes<\/em>, the Revlon doctrine \u201cgoverns sort of how you should behave when you\u2019re selling [a] company, and it says you can\u2019t favor, you can\u2019t think about anything other than shareholder value,\u201d according to Columbia law professor Dorothy Lund. She explained that in that deal, the hostile takeover of cosmetics firm Revlon by the famed financier Ronald Perelman in the mid-1980s, the Revlon CEO had a \u201cdeep personal antipathy\u201d for Perelman and structured a deal with a different private equity buyer. Ultimately, the Delaware Supreme Court ruled that the board of Revlon, like every other company, has a \u201cheightened responsibility to be an auctioneer and thinking about getting the best value for shareholders,\u201d Lund said, \u201cand what you can\u2019t do is play favorites. Everything that you have to do has to be done in service of shareholder value.\u201d<\/p>\n The announcement of the Netflix deal on Dec. 5 implied that Warner had made the best choice for shareholders by choosing the big-red streamer, but Paramount\u2019s announcement the next business day, with a potentially higher bid, put the Revlon<\/em> precedent in play, both Sabino and Lund explained. Paramount\u2019s subsequent regulatory filing revealed what it claimed was a pattern of minimal engagement from major Warner stakeholders, including CEO David Zaslav and the so-called \u201ccable cowboy\u201d John Malone, who serves as chair emeritus, having stepped down from the board earlier this year while retaining significant stock. (Malone backed Diller and QVC in their ultimately unsuccessful 1994 bid for Paramount, as both Malone and Diller discussed in separate memoirs released in 2025.)<\/p>\n While Lund said that she doesn\u2019t personally think there\u2019s a strong Revlon<\/em> claim quite yet, \u201cI think the board has to be really careful what they do in the coming weeks,\u201d because the Warner Bros. Discovery board can\u2019t appear to be playing favorites for personal reasons. \u201cNow the tricky thing is going to be, clearly everybody\u2019s got money left on the table, right?\u201d Lund noted that Paramount has indicated that its $30-per-share offer is not its last and best offer, while Netflix also has room to go up. \u201cNow the board is in this tricky position of trying to engineer this deal to get the most value for shareholders.\u201d They might well be compelled under their Revlon<\/em> duty to either go back to Netflix and say they need a higher bid or go back to Paramount and take its bid seriously.<\/p>\n Lund said that the two-way fight between Paramount and Netflix is almost a fact pattern ripped from one of her exam books, with Paramount\u2019s David Ellison effectively accusing CEO David Zaslav and the Warner board of violating their Revlon duties by favoring a more complex, slower Netflix package over a simple all?cash offer. Lund also raised the Paramount vs. Time<\/em> precedent, which was essentially about the choice of a merger partner on cultural rather than financial grounds. \u201cYou can\u2019t say, \u2018Well, I just like the culture,\u201d which was an argument in that deal where one bidder was seen as more likely to preserve the Time culture. Boards can discount a higher price only for concrete reasons like firmer financing or cleaner regulatory paths, not because they like a bidder\u2019s vibe, in other words.? This is on display between Netflix, Warner and Paramount, with Ted Sarandos and David Zaslav reported to be on friendly terms, and Paramount\u2019s regulatory filings suggesting a frosty distance between Zaslav and Ellison.<\/p>\n The clash of personalities is part of why experts lick their lips over media megamergers. \u201cThese are media personalities,\u201d Sabino said, \u201cand these folks are very powerful individuals \u2026 these are fantastically successful folks. And they don\u2019t like it when you say no.\u201d <\/p>\n Paul Nary, an assistant professor of management who teaches M&A and tracks dozens of mega?deals at the Wharton School of Business, said \u201cthis is like my equivalent of a Super Bowl.\u201d He highlighted the strange appeal that media assets tend to have over time, citing the mix of egos and what are perceived to be \u201cmarquee assets.\u201d Speaking to the likely legal challenges involving Revlon<\/em> and Time<\/em> that will likely emerge between these two offers, Nary said a valuation dispute will be key. He said the Netflix and Paramount offers are close to each other, \u201cdepending on how much you assess the equity components, how you assess the value of the spin-out and all of these other things.\u201d<\/p>\n The value of the spin-out, a company to be known as Discovery Global, stands to be much debated over the coming months, maybe even in court, but at least one analyst has put a number on the assets that Paramount wants to buy\u2014and Netflix doesn\u2019t, explaining the valuation gap. Bank of America Research analyst Jessica Reif Ehrlich and her team released a note on Dec. 7, after the Netflix deal and before the Paramount offer, estimating Netflix\u2019s deal as worth more than $30 per share to WBD shareholders. Ehrlich\u2019s team calculated Discovery Global as being worth roughly $3 per share, which would make Netflix\u2019s $27.75-per-share offer richer than Paramount\u2019s. But if Discovery Global was worth $4 per share, then Paramount\u2019s deal could be seen as richer.<\/p>\n Sabino argued that this case promises to recall even some more esoteric defenses, deep cuts like the There was also the less successful \u201cCuban beer\u201d defense that Sabino characterized as a variation of \u201cJewish dentist.\u201d It arose in 2008 when InBev, a The connection to these deals, of course, is the Middle Eastern funding component of the Paramount bid for WBD. Valued at $24 billion, the Middle Eastern backing was facilitated in part by Jared Kushner, President Trump\u2019s son-in-law, and Sabino said he expects someone to ask whether Americans will ultimately really want Middle Eastern sovereign funds holding big stakes in a Hollywood, even though David Ellison claims that those stakes won\u2019t involve any governance rights. Analyst Rich Greenfield of LightShed Partners challenged Ellison about this directly on a conference call about Paramount\u2019s bid: \u201cJust wondering if you could give us any color on why they\u2019re investing so much with no governance, right? Like what\u2019s the \u2014 is there any rationale you can provide?\u201d<\/p>\n Ellison responded to Greenfield that the compelling \u201cindustrial logic\u201d would create a company generating a lot of cash flow immediately. \u201cWhen you look at that from a returns perspective, it\u2019s incredibly attractive to\u2014obviously, to all shareholders. And from that standpoint, I think that\u2019s why our partners obviously are here.\u201d<\/p>\n Referring to the Middle Eastern and Kushner-adjacent aspects of this story being different from the legal textbooks, Lund said \u201cthere are aspects of this that feel like a throwback, and there\u2019s aspects of this that just feel so 2025.\u201d<\/p>\n \u201cUnder Revlon<\/em>,\u201d she said, \u201cyou have to think about what\u2019s going to create shareholder value. You think that would be a politically neutral thing, right? But when you have a president that\u2019s out there saying, I\u2019ve got a perspective on this, and I\u2019m going to be involved in this, and that\u2019s going to affect regulatory clearance. Now, all of a sudden, you have to worry about that whole political aspect of it as a part of your Revlon<\/em> duty. And that\u2019s very new.\u201d Lund said dealmakers are confronting political entanglements that they haven\u2019t had to confront before. <\/p>\n Sabino, by contrast, downplayed the political aspect as \u201coverblown,\u201d arguing that both offers ultimately turn on money and law, not party ties. \u201cI think politics has very little to do with it, okay? Because again, the bottom line is, this is business. This is about money, okay?\u201d The president, Sabino added, is a \u201cvery energetic guy\u201d who \u201csays a lot of stuff.\u201d At the end of the day, Sabino said, he thinks Revlon<\/em> and Time<\/em> and shareholder value will win out, with Sarandos, Ellison and Warner, regardless of their political persuasion, playing M&A hardball. \u201cThese folks are deadly serious.\u201d<\/p>\n Editor\u2019s note: The author worked for Netflix from June 2024 through July 2025.<\/em><\/p>\n<\/div>\n #sequel #remake #reboot #Lawyers #grow #wistful #corporate #rumbles #Paramount #Netflix #fight #Warner<\/p>\n","protected":false},"excerpt":{"rendered":" Corporate-law scholars say the… <\/p>\n","protected":false},"author":1,"featured_media":3283,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[935,1762,3338,2975,3337,576,716,461,580,1649,3336,3335,3340,3334,457,577,3339],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/3282"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3282"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/3282\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/3283"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\nThe Revlon element<\/h2>\n
Cuban beer, Jewish dentists, and Gulf cash<\/h2>\n