Paramount joins $108bn Netflix and Warner Bros Discovery bidding war
Donald Trump has reacted to and revealed how he will be involved in the outcome of the bidding war between Netflix, Warner Bros. Discovery and Paramount, which will affect what you watch on TV.
Paramount has launched an all-cash tender offer to acquire Warner Bros. Discovery, the Hollywood giant that also owns CNN, in a challenge to Netflix’s own highly contested deal.
The hostile offer sets up a furious battle between Paramount – whose owner Larry Ellison is an ally of Donald Trump – and streaming behemoth Netflix to buy one of Hollywood’s most storied studios.
Netflix shocked the industry last week by announcing it had sealed an agreement to buy the Warner Bros. studio, drawing bitter reactions from voices in Hollywood worried about the future of their industry.
“We’re really here to finish what we started,” David Ellison, chairman and CEO of Paramount, told CNBC as his company made a sixth offer for Warner Bros. since a bidding war began in September.
HOW IS THE PARAMOUNT OFFER DIFFERENT?
Unlike Netflix’s offer, Paramount’s latest bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery – which would be added to its group of TV assets like CBS, MTV and Comedy Central.
The offer values the entertainment giant at $108.4 billion and represents a 139 per cent premium over WBD’s September stock price of $12.54, when the bidding war began.
Paramount in a statement called Netflix’s bid, which values Warner Bros. studios at nearly $83 billion, “inferior and uncertain.”
“WBD shareholders deserve an opportunity to consider our superior all-cash offer,” Ellison said.
Netflix declined a request for comment from AFP.
“The Warner Bros. Discovery acquisition is far from over,” said analyst Emarketer analyst Ross Benes.
“Netflix is in the driver’s seat but there will be twists and turns before the finish line … The battle could become prolonged.” Over the decades, Warner Brothers has produced film classics including Casablanca and Citizen Kane, as well as more recent blockbuster shows including Friends, Game of Thrones and the Harry Potter movies.
Paramount argued its deal provides greater regulatory certainty than the Netflix transaction, which it said would give Netflix a 43 per cent share of global streaming subscribers and face “protracted regulatory challenges across the world.”
The combined company would unite Paramount’s portfolio – including Paramount Pictures, CBS, Nickelodeon and streaming site Paramount+ – with WBD’s assets including HBO Max and major sports rights.
Paramount said the merger would generate over $6 billion in cost savings while maintaining theatrical releases and increasing content spending.
Keeping movies in theatres is a very sensitive issue for the creative industry in Hollywood.
Netflix is already viewed negatively in some Hollywood circles, largely due to its reluctance to release content in theatres and its disruption of the industry.
Many veterans consider theatrical releases essential to cinema’s appeal and prestige, and also integral to maintaining Hollywood jobs and a vibrant economy.
Paramount Skydance is also offering Warner Bros shareholders $US30 cash a share in a deal that includes finance from wealth funds operating in Saudi Arabia, Qatar and Abu Dhabi. It also includes funds from Affinity Partners, an investment firm owned by Trump’s son-in-law, Jared Kushner.
WHAT STARTED THE BIDDING WAR?
The offer came after Netflix announced plans to buy part of Warner Bros. Discovery in a $US72 billion ($A108.4 billion) deal that could send shockwaves through the entertainment industry – especially for streaming services.
The acquisition will include WBD’s film and TV studios, HBO and HBO Max, potentially combining well over 400 million streaming subscribers and a massive library of content.
While Netflix and the HBO platforms will be run separately, a tie-up could bring Netflix smash-hits like Stranger Things and KPop Demon Hunters with WBD classics like Harry Potter, The Sopranos and Friends under one roof.
The deal – which has raised antitrust concerns – was expected to close after Warner Bros. spins off its Discovery Global business in the third quarter of 2026.
WHAT DOES DONALD TRUMP THINK OF THE DEAL?
The Trump administration views the proposed Netflix / Warner Bros deal with “heavy scepticism,” a senior administration official told CNBC.
Mr Trump weighed in on the weekend, saying Netflix’s deal “could be a problem” as it would be left with a huge market share of the film and TV industry. He also said he would be “involved” in the decision.
The New York Post reported that “Paramount Skydance chief David Ellison met with Trump officials and key lawmakers in Washington DC on Wednesday to press his case against Warner Bros. Discovery’s potential selection of Netflix as its merger partner.”
Ellison’s billionaire father, Larry Ellison, is close to President Trump.
Meanwhile, The Wall Street Journal reported that Paramount, in a letter to lawyers for WBD, had warned that a sale to Netflix likely would “never close” because of regulatory challenges in the United States and overseas.
“Acquiring Warner’s streaming and studio assets ‘will entrench and extend Netflix’s global dominance in a matter not allowed by domestic or foreign competition laws,’ Paramount’s lawyers wrote,” the Journal reported.
US Senator Elizabeth Warren, a Democrat, warned the deal “could force you into higher prices, fewer choices over what and how you watch, and may put American workers at risk.” Before the deal was announced, Republican Senator Mike Lee said Netflix’s acquisition of Warner Bros. Discovery’s streaming assets “should send alarms to antitrust enforcers around the world.”
HOW WILL THE DEAL IMPACT STREAMING?
While Netflix has promised to continue Warner Bros. theatrical releases at the box office, all eyes are on how the deal will impact Netflix and WBD’s HBO Max.
They are currently the number one and number four streaming services in the world, with roughly 300 million subscribers and 130 million, respectively.
HBO Max trails behind India’s JioHotStar in the second slot and Amazon Prime in third.
Netflix executives have stressed that the deal will ultimately create more choice and value for consumers — giving subscribers more bang for their buck with a larger suite of titles, though it was not immediately clear how subscription prices might change, if at all.
“[Netflix] has a number of options here,” Hanna Howard, research analyst at Gabelli Funds, said.
It could potentially “follow Disney’s model, which runs both Disney+ and Hulu combined, but the two streaming apps are also available separately, with Disney offering the subscription as a bundle”.
Ms Howard said she expected there would be increased flexibility and bundle offerings if the deal goes through as Netflix sought to escape regulatory scrutiny.
Netflix will also assume WBD’s other brands and properties, like DC Comics, “Harry Potter,” “Game of Thrones” and a slew of video games, “which will give Netflix a way to compete against other large players, i.e., Disney’s franchise,” Ms Howard said.
Along with major film studios and its namesake theme parks, Disney also owns several streaming services, including Hulu, Disney+ and ESPN+.
WHAT IS THE STOCK DOING?
Shares in Warner Bros. Discovery jumped 3.5 per cent on Friday, while Netflix’s stock dipped 0.9 per cent as the deal is expected to face intense regulatory scrutiny from officials in the US and overseas.
Paramount – which also placed bids to take over WBD along with Netflix and Comcast – bashed a potential Netflix merger in a letter to Warner Bros. earlier this week.
Even with a Netflix deal in the works, the billionaire Ellison family at Paramount is planning to plead directly with WBD shareholders, arguing the Netflix deal will be halted by regulators, The Post previously found.
Warner Bros. Discovery’s share price skyrocketed by more than seven per cent on Monday while shares in Netflix fell by over two per cent.
WHY ARE THERE ‘GRAVE CONCERNS’?
Senior White House officials have already met to discuss antitrust concerns about a potential WBD-Netflix merger, The Post reported.
On Thursday, a group of anonymous filmmakers sent a letter to Congress with “grave concerns” about a Netflix deal, arguing the streaming giant would “effectively hold a noose around the theatrical marketplace,” according to Variety.
In a Thursday post on X, former WarnerMedia CEO Jason Kilar wrote: “If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix”.
Variety captured the industry’s alarm with a front-page headline asking: “Is Netflix Trying to Buy Warner Bros. or Kill It?”
Netflix has been planning to argue there is no evidence that the deal would reduce competition or harm consumers, since they could offer a Netflix-and-HBO Max bundle that would ultimately cost less, a source familiar with the matter told The Wall Street Journal.
WHAT ELSE DOES WARNER BROS. OWN?
Along with its namesake film and TV studios, WBD also owns HBO Max and DC Studios, and tons of popular franchises like “The Big Bang Theory,” “The Sopranos,” “Game of Thrones,” “Harry Potter,” “Friends” and “The Wizard of Oz”.
Its Discovery Global business – which is being spun off and will not be included in the deal – includes global cable networks and digital businesses like CNN, Discovery and Discovery+, TNT Sports and Bleacher Report.
This story first appeared in the New York Post
- additional reporting by AFP
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