US senators have asked Paramount to preserve records related to the pursuit of Warner Bros Discovery (WBD) including any communications with Donald Trump as the lawmakers hinted at a “potential investigation”.
The development comes as the WBD board engages with Paramount in a one-week window ending February 23 that gives CEO David Ellison and his team the opportunity to state their case and present a best and final offer. Paramount recently sweetened its all-cash offer, however WBD has not wavered from its acceptance of the Netflix bid that goes to a vote of WBD shareholders on March 20.
“The pattern of evasion, combined with Paramount’s apparent confidence that a politically sensitive transaction will clear without difficulty warrants serious scrutiny,” eight senators including Democratic minority leader Chuck Schumer wrote to Ellison on Thursday.
The “pattern of evasion” referred to Ellison’s refusal to attend the February 3 sub-committee hearing into Netflix’s proposed $82.7bn acquisition of the Warner Bros streaming and studios business, when Netflix co-CEO Ted Sarandos and WBD chief revenue and strategy officer Bruce Campbell were grilled on monopoly implications of their bid.
Paramount said last week that it had complied with the US Department of Justice’s (DoJ) second request for information and expressed confidence that its offer would clear regulatory hurdles because there were no competition concerns. The senators wrote, ‘[W]e can assure you that it raises significant competition concerns that the Senate has not had an opportunity to examine.”
Paramount is being asked to preserve communications related to: its bid; contact with Trump, his family and associates, and government and DoJ officials; lobbyists and intermediaries; donations and contributions to Trump; and decisions made at Paramount-owned CBS that may reflect influence by the Trump administration.
The studio has been given until February 26 to respond to direct questions about these subjects, including any undertakings that the DoJ will facilitate or expedite its review of the offer; any communications between Ellison’s father and multi-billionaire businessman Larry Ellison and the administration; and any communications with Trump or the administration pledging to make changes to CNN – one of Trump’s media betes noires – in exchange for favourable treatment of Paramount’s WBD bid.
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