Warner Bros Discovery Settles Shareholder Lawsuit Over $43 Billion Merger

Warner Bros Discovery (WBD) has settled a high-profile lawsuit brought by shareholders over the contentious 2022 merger between AT&T’s Warner Bros and Discovery. The shareholders had claimed that the $43 billion deal disproportionately benefited larger shareholders, prompting legal action.

According to court filings reported by Deadline, the two sides reached a $125 million settlement through mediation. This agreement marks the end of the lawsuit that had cast a shadow over the merger. Under the terms of the merger, AT&T holds a 71% ownership stake in WBD, while the former Discovery company retains the remaining 29%. Despite AT&T’s majority stake, the leadership team from Discovery has been at the helm of the newly formed WBD company.

Read more: Warner Bros Discovery and Paramount Global Face Mounting Concerns Over Proposed Merger

The defendants in the lawsuit included former Discovery backers such as the Advance/Newhouse Partnership and notable individuals like Robert Miron, his son Steven Miron and Susan Swain. All of them previously served on Discovery’s board of directors, with Robert Miron as board chairman and Swain as the CEO of C-SPAN, a role from which she announced she would step down later this year. The Advance/Newhouse Partnership, privately held by the Newhouse family, owns approximately 8% of WBD stock due to its previous ownership of Discovery shares.

The lawsuit alleged that the merger was “not entirely fair,” contending that it resulted in over $1 billion in payouts to select insiders, leaving common shareholders at a disadvantage. The settlement includes a $100 million contribution from the Advance/Newhouse Partnership, with Robert and Steven Miron each contributing $12.5 million.

Despite the controversy, the leadership structure of the merged entity remains intact. AT&T continues to hold 71% of WBD, while Discovery controls 29%. However, the management team from Discovery, led by CEO David Zaslav, has been running the operations of WBD.

Source: Deadline