Named after the 1986 Delaware decision in Revlon v. MacAndrews & Forbes, the Revlon doctrine “governs sort of how you should behave when you’re selling [a] company, and it says you can’t favor, you can’t think about anything other than shareholder value,” according to Columbia law professor Dorothy Lund. She explained that in that deal, the hostile takeover of cosmetics firm Revlon by the famed financier Ronald Perelman in the mid-1980s, the Revlon CEO had a “deep personal antipathy” for Perelman and structured a deal with a different private equity buyer. Ultimately, the Delaware Supreme Court ruled that the board of Revlon, like every other company, has a “heightened responsibility to be an auctioneer and thinking about getting the best value for shareholders,” Lund said, “and what you can’t do is play favorites. Everything that you have to do has to be done in service of shareholder value.”
While Lund said that she doesn’t personally think there’s a strong Revlon claim quite yet, “I think the board has to be really careful what they do in the coming weeks,” because the Warner Bros. Discovery board can’t appear to be playing favorites for personal reasons. “Now the tricky thing is going to be, clearly everybody’s got money left on the table, right?” Lund noted that Paramount has indicated that its $30-per-share offer is not its last and best offer, while Netflix also has room to go up. “Now the board is in this tricky position of trying to engineer this deal to get the most value for shareholders.” They might well be compelled under their Revlon duty to either go back to Netflix and say they need a higher bid or go back to Paramount and take its bid seriously.
The clash of personalities is part of why experts lick their lips over media megamergers. “These are media personalities,” Sabino said, “and these folks are very powerful individuals … these are fantastically successful folks. And they don’t like it when you say no.”
Ellison responded to Greenfield that the compelling “industrial logic” would create a company generating a lot of cash flow immediately. “When you look at that from a returns perspective, it’s incredibly attractive to—obviously, to all shareholders. And from that standpoint, I think that’s why our partners obviously are here.”
Referring to the Middle Eastern and Kushner-adjacent aspects of this story being different from the legal textbooks, Lund said “there are aspects of this that feel like a throwback, and there’s aspects of this that just feel so 2025.”
“Under Revlon,” she said, “you have to think about what’s going to create shareholder value. You think that would be a politically neutral thing, right? But when you have a president that’s out there saying, I’ve got a perspective on this, and I’m going to be involved in this, and that’s going to affect regulatory clearance. Now, all of a sudden, you have to worry about that whole political aspect of it as a part of your Revlon duty. And that’s very new.” Lund said dealmakers are confronting political entanglements that they haven’t had to confront before.
Sabino, by contrast, downplayed the political aspect as “overblown,” arguing that both offers ultimately turn on money and law, not party ties. “I think politics has very little to do with it, okay? Because again, the bottom line is, this is business. This is about money, okay?” The president, Sabino added, is a “very energetic guy” who “says a lot of stuff.” At the end of the day, Sabino said, he thinks Revlon and Time and shareholder value will win out, with Sarandos, Ellison and Warner, regardless of their political persuasion, playing M&A hardball. “These folks are deadly serious.”
Editor’s note: The author worked for Netflix from June 2024 through July 2025.
