Paramount has launched a hostile bid to acquire Warner Bros Discovery, igniting a fierce competition with Netflix for control of the storied media giant. The company has put forth an offer of $30 per share, directly challenging the $108 billion agreement between Warner Bros Discovery (WBD) and Netflix announced just last week.
This move sets the stage for a dramatic showdown between Paramount, owned by Larry Ellison—a known ally of Donald Trump—and Netflix, the streaming powerhouse, as they vie to purchase one of Hollywood’s most iconic studios. Netflix’s announcement last week of its agreement to acquire Warner Bros sent shockwaves through the industry, sparking concern among Hollywood insiders about the future landscape of media and entertainment.
Paramount’s Strategic Offer
Paramount’s bid encompasses all of Warner’s assets, including cable networks such as CNN, TNT, TBS, and Discovery, which Netflix reportedly does not seek. Paramount argues that its comprehensive offer will provide shareholders with $18 billion more in cash and a smoother path to regulatory approval.
The studio also claims that the deal will serve the best interests of the creative community, movie theaters, and consumers, who would benefit from increased competition. “We believe our offer will create a stronger Hollywood,” stated David Ellison, chairman and CEO of Paramount, in an interview with CNBC.
“The offer values the entertainment giant at $108.4 billion, representing a 139% premium over WBD’s September stock price of $12.54, when the bidding war began.”
The proposed merger would combine Paramount’s extensive portfolio—including Paramount Pictures, CBS, Nickelodeon, and Paramount+—with WBD’s assets, such as HBO Max and major sports rights. Paramount asserts that the merger would generate over $6 billion in cost savings while maintaining theatrical releases and increasing content spending.
Controversy and Concerns
Despite the potential benefits, the Paramount deal has sparked controversy. There are apprehensions about consolidating all these properties under a company with close ties to the Trump administration. Paramount’s $30-per-share cash offer is backed by financing from Affinity Partners, an investment firm run by Jared Kushner, Trump’s son-in-law, and several Middle Eastern government-run investment funds, with additional support from the Ellison family.
Larry Ellison, the world’s second-richest person and father of Paramount head David Ellison, maintains close connections with the White House. Analysts note that Paramount’s offer faces its own antitrust scrutiny due to the potential consolidation of two major television operators.
“Last month, Democratic senators warned that such a transaction would result in ‘one company controlling almost everything Americans watch on TV’.
The merger would also give the combined studio a greater market share than the current leader, Disney, intensifying fears of industry consolidation that have been prevalent in recent years.
Netflix’s Position and Industry Reactions
Meanwhile, Netflix’s approach to acquiring Warner Bros has not been without its critics. The streaming giant is often viewed unfavorably in some Hollywood circles due to its reluctance to release content in theaters, disrupting traditional industry practices.
Many industry veterans consider theatrical releases crucial to cinema’s appeal and prestige, as well as vital to maintaining a robust Hollywood economy. Titanic director James Cameron labeled the buyout a “disaster,” while a group of prominent producers has lobbied the US Congress to oppose the deal, according to trade magazine Variety.
“In a letter to lawmakers, an anonymous group of filmmakers warned that Netflix would ‘effectively hold a noose around the theatrical marketplace’, further damaging a Hollywood ecosystem already strained by audiences’ shift from theaters and TV to streaming.”
In the wake of these developments, Warner Bros Discovery’s share price surged by more than 7% on Monday, while Netflix’s shares fell by over 2%.
Looking Ahead
The unfolding battle between Paramount and Netflix for Warner Bros Discovery is poised to reshape the media landscape significantly. As both companies vie for dominance, the outcome will have far-reaching implications for Hollywood’s future, potentially altering how content is produced, distributed, and consumed.
As the bidding war intensifies, industry stakeholders and observers will be closely monitoring the situation, with regulatory scrutiny and public opinion playing crucial roles in determining the ultimate victor. The next steps in this high-stakes drama remain uncertain, but the ramifications will undoubtedly be felt across the entertainment world.
