The acquisition of Warner Bros. Discovery (NASDAQ:WBD) by Paramount Skydance (NASDAQ:PSKY) is facing new setbacks and the latest news is a lawsuit filed against Paramount that involves the President of the United States. Here’s how President Donald Trump is involved and could impact the mega media merger.
New Paramount Skydance Lawsuit
Fresh off news of 12 states fighting against the pending Paramount Skydance, Warner Bros. Discovery merger, a new lawsuit filed against Paramount alleges the company made an "illegal" deal with President Donald Trump.
The lawsuit alleges that Paramount Skydance CEO David Ellison and his father Larry Ellison promised "illegal private benefits to President Trump in order to remove federal regulatory barriers," according to Variety.
The lawsuit was filed by Paramount Skydance shareholder Paul Robbins, who is represented by Thomas Law, Public Integrity Project and Freedom of the Press Foundation. The report says Robbins has been a Paramount Skydance shareholder since before the Aug. 7, 2025 acquisition was announced.
David and Larry Ellison are named as defendants alongside Paramount Skydance board members Gerry Cardinale, Safra Catz, Andrew Brandon-Gordon, Paul Marinelli, John Thornton, Barbara Byrne, Andrew Campion, Justin Hamill and Sherry Lansing. President Donald Trump is not named as a defendant in the lawsuit, but rather listed as the beneficiary of alleged illegal activity.
The alleged side deal with Trump is said to have allowed the Ellisons to "improperly funnel cash" to the president to help settle existing legal claims. The suit also says that promises were made to fire CNN anchors not liked by the president after the acquisition is completed.
"The Ellisons’ actions not only harm the reputations of the news outlets they currently own, which are hemorrhaging viewers, but they are latent liabilities waiting to be triggered by a future administration," the lawsuit alleges.
The lawsuit comes after the acquisition was already approved by the U.S. Justice Department in mid-June. That approval did not require any concessions or divestitures to be made by Paramount Skydance to complete the deal.
While this presidency or Justice Department didn’t show extreme scrutiny over the deal, the lawsuit states that "future presidential administrations" could show "intense and persistent scrutiny" towards the combined company.
Paramount Responds
Paramount Skydance has lashed back at the lawsuit.
"This lawsuit recycles allegations that have already been reported and already addressed. As we’ve said consistently: no commitments from either David or Larry Ellison have been made to any government body, State AG, or federal agency regarding the future of CNN or any other news property, other than the goal to deliver truth-based journalism," Paramount said, as reported by Variety.
The company also said the acquisition gives consumers "more choice, not less."
"We remain confident in the merger’s fundamentals and will continue toward closing."
Past White House Commentary
The lawsuit follows a long-running saga of the acquisition, which saw Netflix Inc (NASDAQ:NFLX) and Paramount Skydance both in the running to acquire Warner Bros. Discovery before Netflix publicly backed out.
A previous lawsuit against the Ellisons and Paramount alleged that President Trump gave "direct personal assurance" to Larry Ellison that Paramount’s bid for Warner Bros. would get approved.
“The accusations of a professional gambler does not change the fact that the Trump administration, as the president has consistently made clear, remained neutral throughout the Warner Brothers bidding process," White House spokesman Kush Desai told Benzinga at the time.
Trump has shown past public support for the Ellisons, calling them "good friends."
Trump has gone back and forth during the process of whether he would have a hands-on role in deciding who would get Warner Bros. and allowing the Department of Justice make a ruling.
The Trump administration signaled support for Paramount in the war for Warner Bros. from the start.
"Who owns Warner Bros. Discovery is every important to the administration," a senior Trump administration official told the New York Post. "The Warner board needs to think very seriously not just on the price competition but which player in the suitor pool has been successful getting a deal done."
The senior administration official went on to say the best players in the suitor pool are “the Ellisons.”
"Warner really needs to think really hard about the odds of success getting the deal cleared with players outside of Paramount Skydance."
The comments suggested that other bidders, like Netflix, could face regulatory hurdles if they chose to pursue an acquisition of Warner Bros. Discovery.
David Ellison | Photo courtesy: lev radin / Shutterstock.com
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