Netflix Initiated the Agreement First
On December 5, Warner Bros. Discovery (WBD) announced that it had reached an agreement with Netflix to sell the Warner Bros. studio, HBO, HBO Max, and all streaming operations for $82.7 billion, including debt. The transaction would involve separating channels like CNN and Discovery into a new company called Discovery Global.
WBD’s board considered the Netflix deal to offer more certainty for shareholders and a clearer path through regulatory scrutiny.
Paramount Countered with a Larger Hostile Offer
Just days later, on December 8, Paramount Skydance launched an offensive. It presented a public hostile takeover bid for the entire Warner Bros. Discovery, valuing the conglomerate at $108.4 billion, surpassing Netflix’s agreement. Paramount aims to acquire everything: studios, platforms, franchise rights, premium channels, and cable television channels, including CNN.
Paramount argued that its proposal is superior because it’s entirely in cash and merging with Netflix would establish a dominant position in the streaming market.
WBD Rejects Paramount’s Offer and Supports Netflix
On December 17, WBD formally rejected Paramount’s offer, calling it risky and opaque in its financing. The board reiterated its support for the already-pacted Netflix proposal and recommended that shareholders vote in favor. Paramount responded immediately, reaffirming its proposal and publicly questioning the impartiality of the sales process.
Larry Ellison Enters the Game with a Multi-Million Dollar Guarantee
On Monday, the battle took a new turn. Larry Ellison, co-founder of Oracle and one of the world’s wealthiest men, announced a personal guarantee of $40.4 billion to back his son David Ellison’s leading offer.
This move aims to dismantle WBD’s argument about the fragility of financing and demonstrate that Paramount has the resources to fully absorb Warner Bros. Discovery.
CNN: The Uncomfortable Key
Behind the financial dispute lies a political chessboard. Former President Donald Trump has publicly stated that he wants to see CNN in new hands as part of any agreement due to his historical conflict with the channel.
This detail could benefit Paramount’s proposal, which would integrate CNN into its conglomerate while separating it along with Discovery into a new company before the sale, as per Netflix’s agreement.
Trump also asserted that he will have a say in approving or rejecting the operation, adding regulatory pressure and an unusual degree of uncertainty to these mergers.
Hollywood Watches with Concern
The creative industry doesn’t have a unified stance either. Some filmmakers and unions fear that Netflix might concentrate too much power in content production and distribution. Ted Sarandos, Netflix’s co-CEO, attempted to quell criticism by assuring that if the acquisition goes through, Warner Bros. will continue releasing its films in theaters, acknowledging traditional exhibition’s importance to the industry.
What’s Next?
For now, Netflix maintains the advantage with a signed agreement and WBD’s board support. However, Paramount’s improved financial offer, backed directly by the world’s third-richest man, has increased pressure on shareholders who must decide between legal certainty and higher immediate value, albeit with greater risks.
Paramount’s hostile bid remains valid until January 8, while regulatory processes could take months or years to resolve if Netflix successfully closes its operation. The final outcome will depend on both the market and Washington.
Key Questions and Answers
- What is the bidding war about? The battle is over Warner Bros. Discovery, which owns franchises like Harry Potter, Batman, Game of Thrones, and The Lord of the Rings.
- Who are the main players? Netflix and Paramount Skydance, backed by Larry Ellison.
- What are their offers? Netflix agreed to buy WBD for $82.7 billion, while Paramount offered $108.4 billion.
- Why is CNN important? Former President Donald Trump wants to see CNN in new hands, which could benefit Paramount’s proposal as it aims to integrate CNN.
- What’s next? Shareholders must decide between legal certainty and higher immediate value, with Paramount’s offer adding pressure.
