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Hollywood's next mega-deal: Warner Bros Discovery in the crosshairs
Two of Hollywood's most aggressive players are locked in a high-stakes fight to acquire Warner Bros Discovery, as the storied studio grapples with the shifting landscape of streaming and traditional media.
Paramount's hostile bid vs. Netflix's targeted offer
Paramount Global, backed by billionaire David Ellison's Skydance Media, launched a hostile takeover bid for Warner Bros Discovery after months of rebuffed advances. The move bypasses the target company's management, appealing directly to shareholders with an all-cash offer of $30 per share-valuing the entire company at $108.4 billion.
In contrast, Netflix proposed a more surgical deal: purchasing Warner Bros' studio and streaming divisions-including HBO Max, Warner Bros. Pictures, and New Line Cinema-for $82.7 billion, including debt. Netflix's offer combines $23.25 per share in cash with equity in a newly spun-off entity, totaling roughly $27.75 per share for existing investors.
Why Warner Bros matters
Founded nearly a century ago, Warner Bros Discovery boasts one of Hollywood's most valuable content libraries, spanning franchises like Harry Potter, Superman, and Friends, alongside HBO's prestige television catalog, including The Sopranos and Succession. The company has struggled, however, as streaming upends traditional film and TV distribution models.
For Netflix, the acquisition would bolster its film slate and fend off rivals eyeing Warner's intellectual property. With over 300 million subscribers, Netflix sees the deal as a way to deepen its content moat. Paramount, meanwhile, seeks scale to compete with industry giants like Disney and Netflix, aiming to merge HBO Max's 120 million streaming customers with its own 79 million.
Regulatory hurdles and political scrutiny
Both deals face intense regulatory scrutiny. Netflix's proposal has drawn criticism for potentially consolidating too much power in the streaming market, squeezing actors, writers, and local cinemas. A combined Paramount-Warner Bros, however, would control a dominant share of sports and children's programming, raising concerns among advertisers and cable distributors.
Paramount's bid has also sparked political debate, given the Ellison family's ties to former President Donald Trump. Larry Ellison, a Republican mega-donor, and Jared Kushner-Trump's son-in-law and a financial backer of Paramount's bid-have fueled speculation about potential conflicts of interest. Kushner's investment firm, Affinity Partners, is providing financing, though it has agreed not to seek board seats or controlling influence.
Trump's own stance remains unclear. While he has previously praised the Ellisons, he recently criticized Paramount on social media after the company aired a 60 Minutes interview with Republican Representative Marjorie Taylor Greene, a former ally turned critic.
What's next for shareholders and consumers
Analysts suggest the outcome may hinge on how regulators define the competitive landscape. If platforms like YouTube are considered viable competitors, approval could be more likely. Neither Paramount nor Netflix has detailed how they would integrate Warner Bros' assets, leaving questions about pricing and bundling strategies unanswered.
For consumers, a Netflix-Warner deal could mean higher subscription costs if the streamer leverages its expanded library to justify price hikes. Conversely, consolidating services might reduce overall spending for households currently subscribed to both platforms. Over 70% of HBO Max's U.S. customers also pay for Netflix, according to Raymond James analysts.
With both offers targeting completion months from now, the battle for Warner Bros Discovery is far from over-and its outcome could reshape Hollywood's future.
