Paramount‘s $110 billion mega-deal for Warner Bros. Discovery got the green light from WBD shareholders Tuesday morning, as they voted to approve the merger that would combine two of Hollywood’s legacy studios.
The shareholders, however, rejected WBD CEO David Zaslav‘s lucrative compensation package, sending a message to its board in the process.
The votes are preliminary, with WBD expected to release more complete results later on. The company’s secretary said when announcing the preliminary results that shareholders “overwhelmingly” voted to approve merger.
With shareholder approval secured, Paramount, led by CEO David Ellison, just needs to clear the remaining regulatory hurdles (particularly in Europe) to close the deal.
The merger would reshape Hollywood, bringing the vaunted Warner Bros. and Paramount film studios under one roof, combining the HBO Max and Paramount+ streaming services, and creating what will be the largest purveyor of linear TV channels in the country, encompassing CBS, TNT, TBS, CNN, HGTV, MTV, Comedy Central, Nickelodeon and many others.
WBD shareholders met virtually Thursday to vote on the deal.
The only other item on the agenda was the advisory vote on executive compensation, with top WBD executives set to get nine-figure payouts when the deal closes. Institutional Shareholder Services, an influential proxy advisory firm, had urged a “no” vote on compensation due to WBD CEO David Zaslav’s pay package, which will see him collect between $550 million and $886 million, depending on a number of factors.
“The value disclosed in the golden parachute table for CEO Zaslav at over $886 million represents one of the highest golden parachute estimates ever observed,” ISS wrote of the “extraordinary” package.
Shareholders appeared to reject the rich pay package in a significant rebuke, though as an advisory vote it is non-binding, meaning that the company does not have to make any adjustments if it does not want to. Companies will, however, often voluntarily adjust pay packages after shareholders reject them.
“Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” said Zaslav in a statement. “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders. 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 has framed the deal as bolstering competition in a larger battle against tech giants like Amazon and Apple, not to mention Netflix, which is the dominant player in subscription streaming.
He has committed to releasing at least 30 movies a year theatrically with minimum 45 day theatrical windows, and to continue to be a buyer and seller of TV series. HBO Max and Paramount+ will merge, but he has promised to keep HBO running independently as a studio.
But the deal has drawn intense skepticism from many notable Hollywood power players, worried that the consolidation will mean fewer opportunities. That was evident in a letter signed by thousands of Hollywood notables.
“This transaction would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries — and the audiences we serve — can least afford it,” the letter states.
And Democrats in Washington are targeting the deal not only because it would merge CBS News and CNN, two of the largest TV news outlets in the country, but also because of perceived acquiescence to President Donald Trump and his administration.
“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across 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 realizing the creation of a next-generation media and entertainment company that better serves both the creative community and consumers.”
During the special meeting, WBD board chair Samuel Di Piazza Jr. framed the vote as closing the chapter on what had been a long, tumultuous process.
“I would like to thank the WBD Board for their continued leadership and support, particularly over the last year, as we navigated this strategic review process that led us to approve the merger agreement with Paramount Skydance Corporation that we are submitting to you, our stockholders for approval today,” Di Piazza said to open the meeting. “Your board served you, the investors, with commitment, courage and a deep sense of responsibility to creating shareholder value.”
