Netflix And Paramount Face Off In High-Stakes Battle For Warner Bros Discovery

A major power struggle is unfolding in Hollywood as Netflix and Paramount Skydance compete for control of Warner Bros Discovery, one of the entertainment industry’s most historic studios.

Paramount Skydance, led by chief executive David Ellison and backed by the billionaire Ellison family, has spent months courting Warner Bros Discovery as it looks to build a media giant capable of standing up to Netflix and Disney. Those efforts were repeatedly rebuffed, before Warner Bros Discovery announced an agreement to sell its studio and streaming businesses to Netflix.

That move prompted Ellison to escalate matters, launching a hostile takeover bid that bypasses Warner Bros Discovery’s leadership and appeals directly to shareholders.

What Is A Hostile Takeover?

A hostile takeover occurs when a company attempts to acquire another without the approval of its management, typically by making a direct offer to shareholders. This contrasts with a friendly takeover, where both companies’ boards support the transaction.

Paramount said its decision followed what it described as limited engagement from Netflix after its latest overtures, according to regulatory filings cited by media outlets.

How Do The Bids Compare?

Netflix’s proposal focuses on Warner Bros Discovery’s most valuable assets – its film studio and streaming operations – while leaving the remaining parts of the business to be spun off as a separate entity.

The streaming giant values those assets, which include Warner Bros Pictures, New Line Cinema and HBO Max, at $82.7bn including debt. Netflix is offering shareholders $27.75 per share in cash, improving on an earlier offer that mixed cash and equity.

Paramount’s bid takes a broader approach. It is seeking to acquire the entire company, including Warner Bros Discovery’s traditional pay-TV networks, despite their declining fortunes. The offer values the business at $108.4bn, with shareholders promised $30 per share in cash.

To strengthen its position, Paramount has also offered to cover the $2.8bn termination fee Warner Bros Discovery would owe Netflix if it abandons their agreement. Both deals are expected to take several months, if not longer, to complete.

Why Warner Bros Is So Valuable

Founded nearly a century ago, Warner Bros Discovery controls one of the deepest content libraries in entertainment history, spanning Looney Tunes, Casablanca, Friends, Harry Potter, Superman and a slate of acclaimed HBO series such as The Sopranos, Sex and the City and Succession.

However, the company has struggled to adapt to the rapid shift toward streaming, putting pressure on its finances and making it a takeover target.

For Netflix, acquiring Warner Bros’ studio and streaming arm would significantly expand its film catalogue while preventing rivals from snapping up prized intellectual property. Paramount, meanwhile, sees a merger as a path to scale – combining its operations with Warner Bros to better compete with the industry’s biggest players.

Ellison recently acquired Paramount and folded it into his Skydance studio. A successful takeover would add HBO Max’s estimated 120 million subscribers to Paramount’s roughly 79 million, creating a much larger streaming footprint.

Industry analysts say a combined company could also extract efficiencies from traditional television networks. Paramount brings brands such as CBS, Nickelodeon and Comedy Central, while Warner Bros Discovery adds CNN, Food Network and major sports programming.

Regulatory And Political Hurdles Ahead

Both proposals are expected to face intense scrutiny from regulators in the United States and Europe.

Critics of Netflix’s bid warn it could further concentrate power in the hands of the world’s largest streaming platform, potentially affecting creators and independent cinemas. A Paramount-Warner Bros merger, however, would also control a large share of sports, news and children’s programming, raising concerns among advertisers and broadcasters.

Paramount’s offer has attracted additional attention due to its ownership of CBS and the possibility of CNN falling under the same corporate umbrella, particularly given the Ellison family’s connections to former US president Donald Trump.

Some analysts believe those ties could work in Paramount’s favour. Trump has previously criticised CNN and suggested the network should be sold as part of any deal — a scenario more consistent with Paramount’s proposal.

Still, the former president has sent mixed signals. While he has praised the Ellisons in the past, he recently criticised Paramount following a 60 Minutes interview with Republican lawmaker Marjorie Taylor Greene. Trump has also expressed concern about Netflix’s size, even as he has spoken positively about its leadership.

In February, Trump said he would defer to the Department of Justice on any decision, distancing himself from direct involvement.

What It Could Mean For Viewers

For consumers, the outcome remains uncertain.

Neither bidder has outlined how Warner Bros content would be integrated into their platforms or whether new subscription bundles would emerge. Analysts note that Netflix could justify higher prices if its catalogue expands, though some customers might save money if they end up subscribing to fewer services overall.

According to Raymond James, more than 70% of HBO Max subscribers in the US already also pay for Netflix, suggesting significant overlap between audiences.

Jared Kushner’s Brief Involvement

Paramount’s initial financing plan included backing from Affinity Partners, an investment firm founded by Trump’s son-in-law Jared Kushner in 2021. Forbes estimates Kushner’s net worth at more than $1bn.

Kushner and other investors from Saudi and Qatari sovereign wealth funds had agreed not to take controlling roles in the company. However, amid growing scrutiny of Trump-family links, Kushner later withdrew his firm from the deal.

As regulators weigh competition concerns and political factors swirl, the battle for Warner Bros Discovery is shaping up to be one of the most consequential media deals in years — with the final winner still far from certain.