Warner Bros Discovery Urges Shareholders to Reject Paramount’s $108bn Takeover Bid, Backing Netflix Deal

Warner Bros Discovery has urged its shareholders to reject Paramount Skydance’s $108.4 billion (£80.75bn) takeover offer, in a dramatic development in the ongoing battle for control of one of Hollywood’s most storied studios. Paramount had argued that its bid was “superior” to the $72 billion deal Warner Bros reached with Netflix for its film and streaming businesses. However, Warner Bros Discovery’s board has “unanimously” recommended shareholders turn down Paramount’s offer, asserting that the agreement with Netflix serves the “best interests” of the company and its investors.

The media conglomerate initially put itself up for sale in October, receiving “multiple” expressions of interest from potential buyers, including Paramount Skydance. On December 5, Warner Bros Discovery announced it had agreed to sell its film and streaming operations to Netflix. In a detailed legal filing, the company’s board outlined that the Paramount bid carries “numerous and significant risks” and firmly rejected claims that the billionaire Ellison family—who are closely tied to the U.S. president—was financially backing the offer.

In contrast, the board emphasized that the Netflix proposal is well financed and provides superior long-term value for shareholders, reflecting a shift in power within the entertainment sector. Netflix welcomed Warner Bros’ recommendation. Ted Sarandos, Netflix’s co-chief executive, described the company’s merger agreement as “superior” and “in the best interest of stockholders.” In a letter to Warner Bros shareholders, Netflix reiterated that its bid offers a “clearer funding structure and less regulatory risk” compared to Paramount’s offer. Despite this, Paramount retains the option to return with another bid, leaving the takeover saga unresolved.

The competing bids differ significantly in scope. Netflix aims to acquire Warner Bros’ movie studio and HBO streaming service, gaining access to its extensive library of films and shows while securing content for its subscribers. However, Netflix does not intend to purchase Warner Bros’ pay-TV channels. Under the Netflix deal, Warner Bros would need to sell its television networks, including CNN and TNT, as a separate entity prior to closing the acquisition. Paramount, in contrast, seeks to acquire Warner Bros in its entirety, which would include TV networks that compete with its own channels, such as CBS, MTV, and Showtime. Such a comprehensive acquisition could raise antitrust concerns, with regulators potentially questioning the impact on consumer choice as media ownership continues to consolidate.

Following Netflix’s announcement, Paramount Skydance responded with a renewed bid for the entire company, including Warner Bros’ television operations. Analysts warn that any takeover of Warner Bros is likely to face scrutiny from competition authorities in both the U.S. and Europe. The stakes are high, as the new owner would gain a formidable advantage in the fiercely competitive streaming market, acquiring iconic franchises and series including Harry Potter, the MonsterVerse, Friends, and the HBO Max streaming platform.

Mike Proulx of research firm Forrester noted that the battle for Warner Bros could extend for months. “What's unfolding now feels like a real-life, far more consequential episode of HBO's Succession,” he said. “And if you think you know how this plot ends, think again.”

The potential mergers have drawn criticism from parts of the film industry. Both the East and West branches of the Writers Guild of America have called for the deal to be blocked, warning that combining Warner Bros with a rival could lead to lower wages, job cuts, and reduced content output for viewers.

By fLEXI tEAM