Warner Bros. Discovery appears to be favoring Netflix in a competitive bidding process for its assets, but rival bidder Paramount Skydance isn’t backing down. Reports suggest that Netflix has put forward a majority cash offer to acquire Warner Bros. studios and HBO Max, while Paramount Skydance is proposing an all-cash deal that encompasses the entire company, including CNN and HBO. A decision might come as soon as this week, according to sources familiar with the situation.
Insiders believe that the bidding war is effectively a tight race between Paramount Skydance and Netflix, with the chances roughly even at 50-50. Despite increasing speculation that Warner Bros. Discovery may lean towards Netflix, it’s noted that there’s a solid connection between Netflix’s CEO Ted Sarandos and WBD’s CEO David Zaslav. Moreover, Netflix could be viewed more favorably by the Warner Bros. board, while the Ellison family, who run Paramount, are relatively new entries in the media landscape.
Interestingly, if Warner Bros. opts for Netflix’s bid, the Ellisons have a contingency plan that resembles a hostile takeover. They would reach out directly to Warner’s shareholders to argue that the Netflix deal is likely to face significant regulatory hurdles from the Justice Department and may ultimately fall apart if challenged in court.
The Ellisons are positioning themselves as the safer option, asserting that their offer, which currently stands at about $25 per share, would ensure immediate payment to shareholders and sail through regulatory checks. Even if Netflix were to increase its bid significantly, shareholders risk losing value due to legal delays that could stretch over two years—something that could degrade the company’s worth over time.
A media executive conversing with Paramount Skydance officials remarked that the Ellison family seems resolute, preparing plans in case they don’t succeed in this round. Meanwhile, both Warner Bros. and Netflix declined to comment on the ongoing auction.
Discussions at the White House recently revolved around concerns regarding the merger between Netflix and Warner Bros. The combination, given the similarities in their streaming services, could lead to antitrust issues. Additionally, it is believed that European regulators might raise strong objections to this partnership.
On the flip side, Paramount Skydance claims that their merger, primarily involving studios, doesn’t present a monopoly issue due to the abundance of production facilities in the market. They suggest that regulators generally exhibit less concern about the potential studio consolidation compared to the Netflix-WBD union.
It seems the Ellisons are ready to weather any legal battles that surface and are contemplating making a later offer that wouldn’t be part of a bidding war. Meanwhile, the position of Comcast in this competitive game is somewhat uncertain. Although they have submitted a second round of bids, the company may be financially constrained compared to others willing to go beyond $25 per share, and the overall deal could reach a staggering $70 billion.
The CEO of Comcast, Brian Roberts, is also said to have a complicated relationship with Trump, which might add to his company’s challenges in this deal. Comcast representatives did not provide any comments on the situation.
