Paramount is determined to continue challenging Netflix to be the new owner of Warner Bros. Last week, Netflix won a contentious auction to acquire Warner Bros., securing a $72 billion equity deal to purchase TV, film studios and streaming assets. To give a sense of how important this will be, the Bank of America officially declared that “the streaming wars are over” should this be approved by regulators. Over the weekend, President Donald Trump weighed in and assured that he will personally be involved in the approval process.
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Now, Paramount has weighed in with a hostile bid to try to overturn the auction’s results. Unlike Netflix, Paramount has bid for the entirety of Warner Bros. Discovery, with no divesting of assets. Netflix’s rival is offering an enterprise value of $108.4 billion, including $18 billion more in cash than the Netflix offer. It’s being offered directly to shareholders, with Paramount insisting the board had not made the right decision in opting for Netflix.
“Despite Paramount submitting six proposals over the course of 12 weeks, WBD never engaged meaningfully with these proposals which we believe deliver the best outcome for WBD shareholders,” Paramount said in an official statement. “Paramount has now taken its offer directly to WBD shareholders and its Board of Directors to ensure they have the opportunity to pursue this clearly superior alternative.”
The Fate of Warner Bros. is Far From Decided
Speaking to Reuters, industry analyst Ross Benes predicted continued uncertainty in this process. “The Warner Bros Discovery acquisition is far from over,” he observed. “Netflix is in the driver’s seat but there will be twists and turns before the finish line. Paramount will appeal to shareholders, regulators, and politicians to try to stymie Netflix. The battle could become prolonged.” The mention of politicians is no doubt an allusion to Donald Trump; the president has a positive view of Paramount boss Larry Ellison, praising the Republican megadonor as “an amazing man and amazing business person.”
Both of these bids are fraught with regulatory hurdles due to the sheer size of the companies involved. The media watch group FAIR has warned against Paramount’s plans, believing it would be “dangerous for democracy” for Ellison to own both CBS and CNN, and “that seems to be the point.” Meanwhile, unions have already expressed deep concern over the Netflix proposal, fearing the streaming giant would try to reduce theatrical windows or potentially move films out of theaters altogether. It must be noted that these agreements will have a global impact, meaning international regulators will also be involved.
“The board’s overriding priority more than valuation was choosing a bidder that could sign immediately, withstand regulatory scrutiny, and close on the terms required,” a source close to Warner told Forbes. Far from settling the debate, it seems the auction has simply confirmed that Netflix is in first place – and the fate of Warner Bros., and DC, will ultimately be decided by shareholders.
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