Netflix has opted not to increase its offer to acquire Warner Bros Discovery’s studio and streaming business, a decision that effectively positions Paramount for a potential takeover of the iconic Hollywood entity. This development follows Warner’s board announcement on Thursday, which declared that Skydance-owned Paramount’s proposal surpassed the previous agreement with Netflix, rendering the deal “no longer financially attractive” to the streaming giant.
Unlike Netflix, Paramount is aiming to acquire all of Warner’s operations, including networks such as CNN and Discovery. This would place CNN alongside Paramount’s CBS, merging two of Hollywood’s last five major studios. Warner, the owner of HBO Max, DC Studios, and popular franchises like Harry Potter, had supported Netflix’s bid for several months. However, after Paramount increased its offer to US$31 per share, Warner’s board deemed it a “company superior proposal.”
Implications for Hollywood and Media Landscape
A Paramount acquisition of Warner would significantly reshape Hollywood and the broader media landscape. Paramount’s CBS has already undergone notable editorial changes, including the appointment of Free Press founder Bari Weiss at CBS News under Skydance’s new ownership. If successful, the acquisition is expected to expand these changes further.
The merger would unite two of Hollywood’s five remaining legacy studios, along with their theatrical channels. Warner’s extensive library, featuring films like Superman, Barbie, and hit TV series such as The White Lotus and Succession, would join Paramount’s collection, which includes classics like Top Gun, Titanic, and The Godfather. Paramount also owns networks like MTV and Nickelodeon, as well as the Paramount+ streaming service.
Concerns Over Industry Consolidation
While Paramount executives argue that the merger would benefit consumers and the industry, lawmakers and entertainment trade groups have expressed concerns over further consolidation in an industry dominated by a few major players. Critics warn that this could lead to job losses, reduced diversity in filmmaking, and potentially higher streaming subscription costs for consumers.
Antitrust concerns are significant, with the US Department of Justice already initiating reviews, and other countries expected to follow suit.
Paramount Raises the Stakes
The announcement comes as Netflix, Warner, and Paramount have engaged in a public debate over which deal offers a better regulatory path and more value for Warner shareholders. Paramount recently increased its proposed purchase price and agreed to a US$7 billion regulatory termination fee. The company also moved up a “ticking fee” deadline, committing to pay 25 cents per share if the deal isn’t finalized by the end of September.
However, financing the offer involves Paramount taking on substantial debt, with significant backing from Oracle founder Larry Ellison. Foreign sovereign wealth funds have also contributed equity, drawing scrutiny and raising questions about political influences. The Ellisons’ close ties with former US President Donald Trump add another layer of complexity, as he has previously suggested involvement in the deal, though he later retracted those claims.
Historical Context and Future Prospects
The push to acquire Warner comes shortly after Skydance’s contentious buyout of Paramount, approved weeks after settling a lawsuit with President Trump over CBS’s 60 Minutes program. Despite these challenges, Trump has continued to criticize Paramount and 60 Minutes publicly.
As the media landscape continues to evolve, the potential Paramount-Warner merger could redefine industry dynamics. The outcome of regulatory reviews and the ability of Paramount to manage its financial commitments will be crucial in determining the future of this high-stakes acquisition.
