Warner Bros shareholders back $110 billion Paramount-Skydance merger

Warner Bros Discovery cleared a major hurdle in its proposed $110 billion merger with Paramount Skydance after shareholders approved the transaction, even as they signaled sharp unease over the executive pay arrangements tied to the deal.

Those compensation plans drew a clear rebuke in an advisory vote. Under the proposed packages, CEO David Zaslav stands to collect as much as $887 million if the sale goes through. Proxy adviser ISS had described Zaslav’s possible payout as “extremely large”.

“Management now faces a twofold challenge: securing (regulatory) approval for the deal and proving it can create long-term value without fuelling concerns around excessive pay,” PP Foresight analyst Paolo Pescatore said.

With shareholder backing now in hand, the focus shifts to regulators, with authorities in both Washington and London expected to scrutinize how the tie-up could affect competition.

“The real regulatory pressure sits overseas, where European authorities will focus on structural market impact,” said Forrester research director Mike Proulx.

Paramount emerged from a months-long bidding battle with Netflix for Warner Bros, a win that reinforces CEO David Ellison’s position as a major player in an entertainment industry that is rapidly shrinking.

The proposed merger has also triggered resistance from actors, filmmakers and cinema groups, who say the combination would erase a major studio and narrow creative opportunities across the business.

In an open letter, more than 4,000 film industry professionals and consumers said the deal would mean fewer jobs and less choice for audiences.

“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.