Paramount Global, backed by Skydance Media, has reportedly submitted a new offer to acquire Warner Bros. Discovery, challenging a competing proposal from Netflix to purchase the company’s studio and streaming assets.
According to reports, Paramount, with the support of the Ellison family, has proposed a direct offer to Warner Bros. Discovery shareholders of $30 per share, seeking to acquire the entirety of the company, including its traditional television networks.
Paramount has asserted that its proposal represents a “superior alternative” to Netflix’s bid, offering shareholders a more substantial upfront cash payment and a greater likelihood of regulatory approval.
Former President Donald Trump has previously stated that a potential acquisition by Netflix “could be a problem,” alluding to possible competition concerns given the scale of the involved entities.
Paramount, while smaller than Netflix, boasts a portfolio of notable brands, including CBS News, Nickelodeon, and the “Mission: Impossible” film franchise.
The company initiated acquisition overtures several months prior, ultimately prompting Warner Bros. Discovery, owner of HBO and iconic properties ranging from Looney Tunes to Harry Potter, to formally initiate a bidding process.
Analysts on Wall Street have long posited that a merger between Paramount and Warner Bros. Discovery could be strategically advantageous, providing the scale necessary to compete effectively with industry giants like Netflix and Disney.
Paramount’s bid has also been perceived as having an advantage due to the relationship between Trump and the Ellison family, including tech billionaire and Republican donor Larry Ellison, which could potentially facilitate the regulatory approval process.
However, Warner Bros. Discovery reportedly declared Netflix the victor of the auction on Friday, announcing a deal that valued its studio and streaming assets, including HBO, at approximately $83 billion, inclusive of debt.
The company indicated that the sale would proceed following a planned spin-off of other Warner Bros. Discovery business segments, including CNN, into an independent entity.
Paramount’s offer reportedly values the entire company at $108.4 billion, which it claims represents a more favorable deal. Jared Kushner, Trump’s son-in-law, is reportedly among the financial partners collaborating with Paramount on the proposed transaction, according to filings submitted to the Securities and Exchange Commission.
Netflix executives conveyed confidence in their plans on Monday, dismissing Paramount’s attempt as “entirely expected.”
Warner Bros. Discovery stated that it will review the Paramount offer but is not currently altering its recommendation, indicating that it will provide a response within 10 business days.
Both potential acquisitions are anticipated to face scrutiny from competition regulators across jurisdictions, including the United States and Europe.
Analysts have suggested that Netflix’s plan could potentially raise concerns regarding market dominance in the streaming sector, whereas Paramount’s proposal may prompt a review of the implications for advertisers and local television distributors, considering the combined entity’s influence over sports and children’s programming.
Paramount’s plans, which would consolidate CBS and CNN under a single parent company, have also garnered attention due to the potential ramifications for the news industry and the Ellisons’ ties to Trump.
The former president stated over the weekend that he expects to be involved in the approval process.
However, his stance on the matter has appeared somewhat ambiguous.
While expressing potential concerns regarding a Netflix tie-up on Sunday, he also commended the streamer’s leadership. Conversely, on Monday, he criticized Paramount for a “60 Minutes” interview featuring former Trump ally Marjorie Taylor Greene, a Republican representative.
In an interview with CNBC, Paramount CEO David Ellison stated that he had engaged in “great conversations” with Trump regarding the potential transaction, while acknowledging that he did not wish to speak on behalf of the former president.
Netflix is the world’s largest streaming company, with over 300 million subscribers.
Mr. Ellison’s strategy would leverage his earlier acquisition of Paramount, which he integrated into his Skydance film studio.
“Paramount ultimately needs this deal more than Netflix,” stated Ben Barringer, head of technology research at Quilter Cheviot, characterizing the Warner Bros. Discovery assets as merely “nice to have” for the streaming service.
During a CNBC appearance on Monday, Mr. Ellison emphasized the broader benefits of his plan for the media industry, asserting that a Netflix acquisition of Warner Bros. Discovery would grant a single entity excessive power over actors and other industry participants.
“It’s a horrible deal for Hollywood,” he stated.
He also expressed concerns that Warner Bros. Discovery’s plan to spin off its traditional networks into an independent company would ultimately prove unsuccessful and detrimental to shareholders.
“I think [its shares are] going to be worth a lot less than people are claiming,” he said.
However, Netflix executives, speaking at a business conference on Monday, expressed confidence that their acquisition could secure regulatory approval, noting that their plan does not involve substantial workforce reductions.
Shares in Warner Bros. Discovery reportedly rose more than 4% on Monday, while Paramount shares jumped 9%.
However, Netflix shares reportedly declined by more than 3%.
While it may appear to be a straightforward merger, the situation has taken on the characteristics of a Hollywood drama.
Here’s what to know about Netflix and Paramount Global’s potentially transformative battle over Warner Bros. Discovery.
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