Warner Bros CEO To Collect $667 Million In Paramount Deal

Authored by Andrew Moran via The Epoch Times (emphasis ours),

Warner Bros. Discovery CEO David Zaslav will collect about $667 million in compensation after the entertainment empire completes its sale to Paramount Skydance.

Last month, the company accepted Paramount’s $110 billion proposal, concluding a months‑long bidding contest after Netflix exited the talks.

One of the key beneficiaries of the merger will be Zaslav, who could pocket several hundred million dollars, according to a March 17 Securities and Exchange Commission filing.

Zaslav is in line for approximately $34.2 million in cash severance, a package that includes salary continuation and bonuses tied to a change‑in‑control termination, the regulatory filing stated.

He would also receive $115.8 million in vested equity, along with $517.2 million in unvested share awards that would vest upon finalization of the sale.

Vested equity is stock or stock-based awards that executives have earned the legal right to keep. Unvested shares are shares that executives have been authorized to receive but have not yet earned the right to own.

The payout could also include up to $335 million in tax reimbursements. However, this figure will decline over time depending on when the Paramount-Warner Bros. deal is finalized.

Warner Bros. said this figure is based on tax‑code provisions “that are expected to cause it to significantly decline with the passage of time,” and noted that the tax payment would drop to zero if the deal closes in 2027.

Paramount anticipates the acquisition will be completed by the third quarter this year.

Ultimately, the filing states that these amounts may not be realized as they are “based on multiple assumptions that may or may not actually occur or be accurate as of the date referenced.”

The companies expect to hold a shareholder vote in early spring and are targeting a Sept. 30 closing, subject to shareholder and regulatory approval.

Current shareholders could receive a 25-cent-a-share “ticking fee” for each quarter the acquisition does not close, totaling approximately $650 million. Additionally, Warner Bros. would receive a $7 billion termination fee if the merger is not authorized due to regulatory pushback.

Paramount paid Netflix a $2.8 billion termination fee in February after Warner Bros. terminated its agreement with the streaming service.

The film and television studio agreed to pay $31 per share in cash to purchase 100 percent of Warner Bros.’ shares. The deal will be funded by $47 billion in equity, backed by the Ellison family and RedBird Capital Partners. Additionally, the purchase includes $54 billion of debt commitments from Apollo, Bank of America, and Citigroup.

Since landing on the winning side of the hostile takeover efforts, Paramount’s shares have declined about 25 percent to below $10. Conversely, Netflix stock has rebounded about 16 percent, potentially targeting $100.

Regulatory Hurdles

Whether it was Netflix or Paramount buying Warner Bros., the merger was likely to face pushback from a growing chorus of U.S. lawmakers.

In a March 12 letter, Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Rep. Sam Liccardo (D-Calif.), and 11 other members of Congress demanded that the Department of Justice and the Treasury Department investigate antitrust and national security concerns related to the merger.

“Congress has a responsibility to ensure that merger enforcement in concentrated creative industries—particularly transactions involving substantial foreign capital—is conducted rigorously and in strict adherence to federal law,” the letter states.

“The structural reduction in independent studios, the Pay-1 foreclosure risks, and the downstream impact on exhibitors warrant thorough and transparent review.”

But the purchase may not receive heightened scrutiny from the Federal Communications Commission (FCC).

FCC Chairman Brendan Carr told CNBC earlier this month that the Paramount-Warner Bros. deal was “cleaner” than the Netflix alternative.

“There’s a lot of concerns when Netflix was the potential buyer there. That particular combination raised a lot of competition concerns,” Carr said on March 3.

“If there’s any FCC role at all, it’ll be a pretty minimal role. And I think this is a good deal, and I think it should get through pretty quickly.”

It remains to be seen whether the Committee on Foreign Investment in the United States—also known as CFIUS—will object to the deal. Paramount’s offer includes about $24 billion from Gulf state sovereign wealth funds.

Kimberly Hayek and Jill McLaughlin contributed to this story.