Warner Bros. Discovery’s board has once again turned down a bid from Paramount and advised shareholders to stay with Netflix’s competing offer. In a message to shareholders, Warner Bros.’ board stated that Paramount’s revised hostile bid of $108.4 billion USD was a risky leveraged buyout that investors should decline. The board highlighted that Paramount’s proposal relies heavily on debt financing, increasing the closing risks, while reaffirming its support for Netflix’s $82.7 billion deal for the film and television studio and other assets. Warner Bros. Discovery chair Samuel Di Piazza Jr. emphasized that the binding agreement with Netflix provides better value with higher certainty compared to Paramount’s offer.
The battle between Paramount and Netflix for control of Warner Bros. and its valuable film and television studios, along with its vast content library including popular franchises like Harry Potter, Game of Thrones, Friends, and DC Comics, continues. Warner’s leadership has persistently rejected Paramount’s bids, advocating for shareholders to favor the sale of the streaming and studio business to Netflix.
Paramount recently announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison to support $40.4 billion in equity financing for its offer. This move, along with an increased promised payout to shareholders of $5.8 billion if the deal faces regulatory challenges, matches Netflix’s terms. However, Warner Bros.’ board expressed concerns about Paramount’s financing plan, which would burden the smaller Hollywood studio with $87 billion in debt post-acquisition, marking it as the largest leveraged buyout in history.
Following a meeting to review Paramount’s amended offer, the Warner Bros. board outlined its reasons for rejecting the bid in a 67-page amended merger filing. Netflix’s co-CEOs Ted Sarandos and Greg Peters welcomed Warner Bros.’ decision, hailing it as the superior proposal that would deliver the most value to stakeholders, consumers, creators, and the entertainment industry at large.
While Paramount’s hostile bid remains active, Warner shareholders have until Jan. 21 to make their decision. The complexity of the situation arises from Netflix and Paramount’s differing objectives, with Netflix aiming to acquire Warner’s studio and streaming business, while Paramount seeks the entirety of the company, including networks like CNN and Discovery.
The potential merger with either Netflix or Paramount will face intense antitrust scrutiny, likely triggering a review by the U.S. Justice Department and other regulators. Political factors, including U.S. President Donald Trump’s involvement, could play a role in the deal’s outcome. Regardless of the decision, the entertainment industry is poised for significant shifts in movie production, distribution channels, and the news media landscape.