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Paramount Skydance plans to nominate its own slate of directors for election at Warner Bros. Discovery’s 2026 annual meeting and to urge shareholders to vote against the Netflix agreement if WBD calls a special or early meeting to approve it. The strategy is designed to reshape the board that twice rejected Paramount’s bid and to rally investors behind a rival deal Ellison insists is superior on both value and risk.

“WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer,” Paramount CEO David Ellison wrote in a letter to Warner shareholders.

At the same time, Paramount has filed a lawsuit in Delaware Chancery Court seeking to force Warner Bros. Discovery to disclose more information about how it valued the Netflix transaction and the planned spin-off of WBD’s global cable networks into a separate public company. Paramount argues that without those details—particularly around the treatment of debt and the board’s “risk adjustment” of its $30‑per‑share all‑cash proposal—investors cannot make an informed choice between the two competing paths.​

Competing visions for WBD

Under Paramount Skydance’s hostile bid, the Ellison‑led company is offering $30 in cash for every Warner Bros. Discovery share, seeking to acquire the entire company, including networks such as CNN and TNT, at a valuation of roughly $108 billion that contemplates assuming or addressing about $87 billion of WBD debt. Warner Bros. Discovery’s board has rejected that offer as inadequate and overly leveraged, arguing it is not “even comparable” to the Netflix proposal.​

Netflix, by contrast, has agreed to buy WBD’s film and television studios, HBO and HBO Max in a cash‑and‑stock deal valued at $27.75 per WBD share, implying about $72 billion in equity value and $82.7 billion in enterprise value, while leaving the legacy cable networks behind as a stand‑alone public company. Warner Bros. Discovery’s board has endorsed that transaction and urged shareholders to back it, positioning the Netflix tie‑up as a cleaner, lower‑risk way to reshape the company for the streaming era.​

What the proxy fight means for investors

A proxy contest would give Paramount an opportunity to ask Warner Bros. Discovery shareholders to oust some or all incumbent directors at the 2026 annual meeting and replace them with nominees more open to engaging on its offer. Paramount has said those directors, if elected, would “in accordance with their fiduciary duties” use WBD’s rights under the Netflix agreement to revisit its bid and potentially steer the company into a transaction with Paramount instead.​

If Warner Bros. Discovery convenes a shareholder vote on the Netflix deal before that meeting, Paramount has pledged to solicit proxies against approving the agreement, effectively turning the vote into an early referendum on which transaction shareholders prefer. Governance and investor‑relations experts say that dynamic shifts more of the leverage from the boardroom to the shareholder base, particularly if investors view the choice as a trade‑off between headline price and execution risk.​

A Netflix spokesperson declined to comment when contacted by Fortune.

Legal pressure on disclosure

In its Delaware complaint and in Ellison’s letter to WBD investors, Paramount contends that Warner Bros. Discovery has failed to provide the “customary” financial disclosure expected when a board recommends a transaction or issues a Schedule 14D‑9 response in the face of a competing tender offer. The suit says WBD has not spelled out how it valued the Netflix package versus the residual “stub” equity in the spun‑off networks, or how the purchase‑price adjustments for debt and other liabilities affect the real economics for shareholders.​

Ellison argues that Delaware law requires boards to give shareholders enough information to make fully informed investment decisions when they are asked to tender shares or vote on a deal, and that WBD has fallen short of that standard. Paramount is asking the court to compel Warner Bros. Discovery to fill in those gaps before Netflix’s offer period expires, which would give investors a clearer basis on which to compare the rival transactions.​

What’s next

Warner Bros. Discovery has so far stood by its endorsement of the Netflix transaction and has continued to reject Paramount’s advances, setting up what could be a prolonged fight stretching from the courtroom to the annual meeting. Paramount, for its part, is signaling that it and the Ellison family are prepared to stay in the fight, betting that more disclosure and mounting shareholder scrutiny will eventually tilt the balance in favor of its all‑cash bid.

East L.A. rock group Los Lobos have filed two lawsuits against Sony, claiming the band was underpaid royalties on the songs they recorded for the La Bamba and Desperado soundtracks.

Between them, the lawsuits ask for between $1.5 million and $2.75 million in compensation. They were filed in California state court late last year, and only came to light when one of the suits was transferred to a federal court on Friday (January 9).

That lawsuit names Sony Music Entertainment and its label Milan Entertainment as defendants, and centers on Canción del Mariachi, a song Los Lobos recorded for the 1995 Antonio Banderas film Desperado.

The song was used as the opening track for the movie, and appeared on both the Desperado soundtrack and in a 2004 compilation soundtrack of all the Mariachi movies, titled Mexico and the Mariachis, released by Milan Entertainment. Milan was acquired by Sony Masterworks in 2019. The song has been available via that soundtrack on streaming since 2018.

“Plaintiffs’ representatives have recently discovered that neither Sony, nor Milan, or any other Sony-related entity has ever accounted to Los Lobos for any digital streaming of the recording in any country, territory, or place, for any streaming, at any time, for any royalty period,” states the complaint, which can be read in full here.

“Neither Sony, nor Milan, or any other Sony-related entity has ever accounted to Los Lobos for any digital streaming of the recording in any country, territory, or place, for any streaming, at any time, for any royalty period.”

Los Lobos, in a complaint against Sony

This failure to account for the song’s streams became “even more egregious” in recent years when Canción del Mariachi gained new fans after UFC fighter Ilia “El Matador” Topuria began using it as his “walkout” song or “anthem,” the complaint states. It alleges Sony was aware of the song’s resurgent popularity, as it had the title changed to Canción del Mariachi (Ilia Topuria ‘El Matador’ Anthem).

Given that Los Lobos’ recording contract gave the band 24% of net revenue on the song, the band estimates they are owed between $500,000 and $750,000 for the more than 600 million streams the song has garnered. The complaint asks the court for a complete accounting of the royalties owed on the track.

It also states that Los Lobos have reason to believe the recording was licensed for use on television, for which the band never received royalties.

Sony Music declined to comment.

The other lawsuit names Sony Pictures Entertainment and Sony-owned Columbia Pictures as defendants, and alleges that members of Los Lobos – David Hidalgo, Louie Perez, Cesar Rosas, Conrad Lozano, and Steve Berlin – were never paid royalties for streams outside the US and Canada for their 1987 cover of La Bamba.

Los Lobos recorded the song for a biopic of rocker Ritchie Valens, also titled La Bamba. Valens died in 1959 in a plane crash in Iowa that also killed Buddy Holly and ‘Big Bopper’ J.P. Richardson. Valens had originally recorded La Bamba, which he had adapted from a Mexican folk song.

Los Lobos’ version of the song became an international hit, reaching No. 1 on the charts in 15 countries, according to the complaint as cited by Rolling Stone, and spent three weeks at No. 1 on the Billboard Hot 100.

Despite the song’s international success, “plaintiff’s representatives have recently discovered that no royalties for streaming exploitation of the recordings have ever been paid to Los Lobos for any country outside of the United States and Canada,” stated the complaint, as quoted by Billboard. The complaint describes that as a “massive deficiency.”

The complaint says Sony is responsible for the underpayment because it handles non-US and Canada royalty accounting for the La Bamba soundtrack. It estimates the back royalties owed run between $1 million and $2 million.

Los Lobos was formed in East Los Angeles in 1973 and came to prominence with La Bamba in 1987. They have recorded 17 studio albums, including most recently 2021’s Native Sons, and have been nominated for 12 Grammy awards, winning four.

 Music Business Worldwide