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Netflix/WBD Update: Antitrust Division Head Out; Ellison/Trump Meet?

Big Netflix/WBD deal updates: DOJ antitrust division head Gail Slater is out; Paramount's David Ellison and Trump reportedly met last week.

Earlier this week, David Ellison's Paramount Skydance looked to sweeten the pot for Warner Bros. Discovery (WBD) shareholders in Ellison's bid to scuttle the Netflix/WBD deal. Paramount's revised offer now includes a $0.25-per-share "ticking fee" paid to WBD shareholders for each quarter a deal between Paramount and WBD hasn't closed after December 31, 2026 (meaning Paramount would pay WBD shareholders approximately $650 million in cash value for every quarter the deal isn't finalized). In addition, Paramount agreed to pay a $2.8 billion termination fee to Netflix and to work with WBD on its debt financing costs and obligations. Previously, we shared that Ellison's claim that he could wrap up a deal of this size in such a short period of time raised a major red flag, and that we couldn't see that becoming a reality unless Ellison was looking to lean hard on Donald Trump for help. Earlier today, there were two new developments that should fuel some concerns regarding Paramount and Trump:

Gail Slater Out: Earlier today, the news hit that Gail Slater, head of the Department of Justice's antitrust division, who was overseeing the review of the Netflix/WBD deal, parted ways with the DOJ abruptly on Thursday. "It is with great sadness and abiding hope that I leave my role as AAG for Antitrust today. It was indeed the honor of a lifetime to serve in this role," Slater posted on social media. Though Slater had previous ties to VP JD Vance and was confirmed with bipartisan support, rumors were that Slater and Attorney General Pam Bondi, who is also overseeing the Netflix/WBD deal, had butted heads several times.

David Ellison & Trump Reportedly Met Last Week: Despite Trump telling NBC's Tom Llamas, "I haven't been involved," when it comes to the face-off between Paramount and Netflix, CNN/Reliable Sources' Brian Stelter is reporting that Ellison and Trump met at the White House last week, and that they had "two wide-ranging conversations, according to two sources with knowledge of the meetings."

Last month, Netflix and Warner Bros. Discovery announced that the streamer has adjusted its agreement for Warner Bros. Discovery's studios and streaming service to an all-cash deal. Though the offer is still set at $82.7 billion ($27.75 per share), the $4.50-per-share Netflix stock component was removed, with the amended deal now tied directly to the successful spinoff of Discovery Global (CNN, TNT, Food Network, and other cable networks) and additional approvals.

The news came as Ellison's Paramount Skydance continued its efforts to block the Netflix/Warner Bros. Discovery deal and take its hostile offer directly to shareholders. Previously, Paramount Skydance filed a court action to force Warner Bros. Discovery to reveal the source of funding for Netflix's offer, a move that would lead to Netflix's all-cash shift. In addition, Ellison's company announced that it would back a slate of directors to challenge the WBD board at WBD's next shareholders' meeting.

Paramount Skydance Extends Hostile Bid Deadline for Warner Bros. Discovery Shareholders: Originally set for this past Wednesday, Paramount Skydance filed an extension with the SEC to February 20th. The move comes as Ellison and reps from Paramount Global continue to speak with investors, as well as reps from the global theater industry, over the past several weeks.

Warner Bros. Discovery: "93%" of Shareholders Rejected Paramount Skydance's "Inferior Scheme": In a statement responding to Paramount Skydance extending the deadline, WBD is claiming that the vast majority of its shareholders have passed on what Ellison is selling. "Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix. It's also clear our shareholders agree, with more than 93% also rejecting Paramount's inferior scheme. We are confident in our ability to achieve regulatory approval for the Netflix merger and look forward to delivering the tremendous and certain value our agreement will provide to Warner Bros. Discovery shareholders," read the statement.

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