Netflix’s Offer: A $72,000 Million Deal
Netflix initiated the bidding war by announcing an agreement to acquire Warner Bros. Discovery’s film and television studios, along with HBO and its streaming service. The $72,000 million capital deal (equivalent to $82,700 million in enterprise value) surpassed previous offers from Paramount and Comcast during weeks of negotiations. Netflix’s offer included approximately $28 per share, surpassing Paramount’s previous proposals of around $24 per share. Additionally, Netflix agreed to pay a $5,800 million break-up fee if the deal fails regulatory approval.
Ted Sarandos, Netflix’s co-CEO, stated that the merger would “define the next century of storytelling” and pledged to maintain Warner’s theatrical releases and enhance the catalog without raising costs for users.
Paramount’s Counterattack: $108,400 Million
Paramount swiftly responded by presenting a hostile bid for the entirety of Warner Bros. Discovery, valued at $108,400 million or 30 dollars per share—significantly higher than Warner’s preferred deal with Netflix. Paramount accused Warner of favoring Netflix, abandoning a competitive process, and “predetermining” the winner. Internal letters from Paramount questioned the impartiality of the sale.
Paramount’s offer is backed by resources from the Ellison family (supported by Oracle co-founder Larry Ellison’s fortune) and political connections close to former President Donald Trump’s administration.
Trump Enters the Game: Political Pressure and Regulatory Doubts
The corporate dispute took a political turn when Donald Trump expressed concerns about market concentration issues if the Netflix-Warner Bros merger proceeded. In recent speeches, Trump stated that he would participate in the government’s decision on approving the agreement—an unusual move.
Trump has shown a preference for an outcome ensuring new owners for CNN, with whom he has a long-standing conflict. This point might favor Paramount, as its offer includes all of WBD’s assets while Netflix plans to sell CNN before finalizing the purchase.
Furthermore, the White House faces pressure from Democratic and Republican lawmakers, as well as Hollywood unions, who fear job cuts, reduced production, and increased prices for consumers.
Wall Street’s Reaction: Penalizing Netflix, Boosting Paramount
The bidding war has already impacted the market:
- Netflix shares fell more than 4% on Monday, extending its fourth consecutive day of losses.
- Warner Bros. Discovery rose 3.59%, driven by expectations of a higher bidding war.
- Paramount Global rebounded 9.28% after announcing its counteroffer.
Analysts from GBM and Morningstar warn that acquiring Warner would further consolidate Netflix’s power by integrating production, distribution, and streaming, raising antitrust concerns in the US and Europe.
What’s at Stake: Franchises, Audiences, and a Historic Library
Beyond the figures, the dispute revolves around one of Hollywood’s most valuable libraries. The victor will control franchises such as:
- Harry Potter
- Game of Thrones
- DC Comics
- Batman
- The Lord of the Rings (New Line Cinema)
- Dune
- Friends
- The Big Bang Theory
- Looney Tunes
- Classics like Casablanca, The Sopranos, Citizen Kane, The Wizard of Oz
Moreover, ownership would enable the development of new projects in video games, live entertainment, and multi-platform ecosystems—an area where Netflix is aggressively expanding.
Key Questions and Answers
- Who will acquire Warner Bros. Discovery? The outcome remains uncertain, with both Netflix and Paramount vying for control.
- What are the key differences between the offers? Netflix’s offer is valued at $72,000 million, while Paramount’s hostile bid amounts to $108,400 million. Netflix aims to maintain Warner’s theatrical releases and enhance its catalog, whereas Paramount seeks complete ownership of WBD’s assets.
- How might political pressure and regulatory scrutiny impact the deal? Political involvement from figures like Donald Trump and concerns about market concentration could influence the government’s decision on approving the merger.
- What are the implications of acquiring Warner Bros. Discovery’s library? The victor will control valuable franchises and gain the ability to develop new projects in video games, live entertainment, and multi-platform ecosystems.
