Warner Bros shareholders approve Paramount’s takeover

Warner Bros Discovery shareholders have backed the company’s proposed $110bn merger with Paramount Skydance, but cast an advisory vote against executive compensation plans tied to the deal.

Per a preliminary vote count on Thursday, the overwhelming majority of Warner Bros Discovery shareholders voted in support of selling the entire business to Paramount for $31 a share, the company said. Including debt, the deal is valued at nearly $111bn.

Under the pay packages proposed to executives, CEO David Zaslav could receive up to $887m if the sale is completed.

Skydance-owned Paramount wants to buy all of Warner. That means HBO Max, valuable titles like Harry Potter and even CNN could soon find themselves under the same roof with CBS, Top Gun and the Paramount+ streaming service. A greenlight from company shareholders increases the likelihood of that becoming a reality.

Attention now turns to regulatory authorities, with both Washington and London expected to examine the merger’s impact on competition.

The United States Department of Justice sent subpoenas in late March seeking information on how the merger would affect studio output, content rights, streaming competition and movie theatres.

Paramount triumphed over Netflix in a months-long bidding war, sealing the Warner Bros deal and cementing chief executive David Ellison as a powerful force in the rapidly contracting entertainment landscape.

The merger has faced considerable opposition from actors, filmmakers and theatre groups that have raised concerns about the loss of a major studio and its impact on the creative community, theatre owners and moviegoers.

“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros Discovery,” a Paramount spokesperson said.

The deal is expected to close in the third quarter this year.

The merger will reduce the number of major US film studios to four and lead to fewer jobs, creative opportunities and less choice for consumers, over 4,000 film industry professionals and consumers said in an open letter, which called on California Attorney General Rob Bonta to consider taking legal action to block it.

Ellison promised theatre owners that Paramount and Warner Bros would release at least 30 films a year if regulators clear the deal.

However, analysts expect Hollywood’s overall film output to contract, as theatre attendance declines and the major studios focus on fewer, big-budget films.