Paramount Skydance’s Plan for Warner Bros. Discovery
David Ellison, the CEO of Paramount Skydance, is reportedly hesitant to “overpay” for Warner Bros. Discovery (WBD), with speculation suggesting he might not go beyond $25 per share, according to sources close to the matter.
The backdrop here? A connection to Donald Trump.
Recently, the owners of Paramount, CBS, and Comedy Central proposed a bid of $24 per share for WBD, which oversees HBO and CNN—though the exact figure mentioned was $23.50 by someone familiar with the negotiations. On Tuesday, WBD confirmed that it had received unsolicited offers and is open to discussions about a potential sale.
After the news broke, WBD’s stock surged by 11%, landing at around $20.53, but sources affirmed that Paramount Skydance has no intention of increasing its bid beyond $25.
This stance seems tied to Ellison’s understanding that U.S. antitrust issues and personal conflicts could pose significant challenges for competing bidders. Notably, Paramount Skydance appears to have strategic support from President Trump.
Ellison is linked to Trump through his father, Larry Ellison, a well-known software mogul and longtime Trump supporter. With a net worth exceeding $350 billion, Trump holds a unique influence in these discussions.
Interestingly, it’s reported that Trump has a less-than-favorable view of Brian Roberts, the CEO of Comcast, which could be seen as a primary competitor for WBD.
Even though Comcast has shown interest in acquiring WBD, it’s also the owner of MSNBC and NBC, channels that Trump views as not aligned with his objectives.
“Mr. Trump strongly dislikes Comcast and Brian Roberts,” remarked a source familiar with the Ellison strategy. “They’re looking to leverage those sentiments.”
While the $25 cap on the bid isn’t set in stone, it lays out a clear boundary for now. Earlier this week, it was revealed that Warner Bros. Discovery’s CEO, David Zaslav, turned down three separate offers from Paramount Skydance, the most recent being $24 per share.
Insiders suggest Zaslav’s recent public comments might have been a response to Ellison’s competing offer of $26 to $28 per share, as he aims to ultimately sell WBD for up to $30 per share, boosting the company’s valuation to over $70 billion.
Since its formation in 2022, following the merger of Discovery Inc. and WarnerMedia, WBD has effectively positioned itself as a leading studio and developed a strong streaming platform.
However, sources indicate that the team around Zaslav believes he may not have many viable options ahead and advises Ellison to adopt a longer strategy, which might even involve hostile takeover proceedings.
There’s a consensus that regulatory challenges and personal rivalries might hinder any sale that doesn’t involve Ellison, particularly as Zaslav works to maintain WBD’s stock above the $12 threshold.
The mention of Netflix shows interest, but only regarding WBD’s streaming and studio assets, set for separation next spring. Yet, word is that President Trump’s FCC would not allow Netflix, the predominant streaming service, to take over WBD’s streaming segment.
Amazon has also expressed keen interest in WBD’s streaming service and studio operations. Still, its existing legal troubles with the FTC complicate any major buyout potential, as flagged by Ellison’s legal and financial advisers.
There’s ongoing internal dialogue about whether Ellison is overextending himself at $25 per share, given the high probability that no rival bid will emerge.
The Justice Department’s antitrust division and the FCC chose not to comment on the matter, as did representatives from Paramount Skydance and Comcast. However, a source close to Roberts suggested that antitrust issues might not be a major concern, given plans to spin off MSNBC and NBC as separate entities.
