The battle for control of Warner Bros. Discovery has escalated into a fierce capital showdown. Paramount Global (post-merger with Skydance) launched a strong offensive today, proposing an all-cash acquisition of all outstanding shares of Warner Bros. Discovery. This bid aims to counter Netflix's earlier offer with superior financial terms and certainty, potentially reshaping the global media and entertainment landscape.
As new bidding details emerged, the secondary market reacted swiftly. Investors expressed their preferences through trading activity, with Paramount's stock surging nearly 10% in early New York trading, while Netflix's shares fell approximately 4% under pressure.
Analysts note that Netflix's stock decline risks undermining the value protection mechanism in its stock-and-cash offer, potentially forcing the streaming giant to raise additional cash to maintain deal attractiveness.
The bidding war's impact extends beyond Wall Street, drawing regulatory scrutiny in Washington. The U.S. President has publicly expressed antitrust concerns about Netflix's proposed acquisition, warning it could lead to excessive market concentration and hinting at personal involvement in approval decisions. Consequently, prediction markets show the probability of a Netflix-Warner deal has dropped from 20% to 16%.
Paramount's all-cash offer values Warner Bros. Discovery at $108.4 billion, providing both higher premiums and a clearer regulatory path compared to Netflix's complex cash-and-stock structure. Warner shareholders now face a critical choice: accept Paramount's promised capital injection and industrial synergies, or bear the uncertainty of Netflix's stock volatility and prolonged regulatory review.
The Cash Premium Advantage Paramount's $30 per share all-cash offer represents a 139% premium to Warner Bros. Discovery's undisturbed stock price as of September 10, 2025. This contrasts with Netflix's Friday proposal valued at approximately $27.75 per share, using a "23.25 cash + 4.50 stock" hybrid structure. Paramount notes Netflix's offer not only carries lower total value (enterprise value around $82.7 billion) but also heavily depends on Netflix's future stock performance.
Structurally, Paramount emphasizes its proposal acquires all Warner assets, while Netflix's agreement assumes divestiture of certain Warner properties, leaving shareholders with a smaller, highly leveraged "global network" remnant. Paramount CEO David Ellison stated the all-cash approach provides "certainty and faster completion," avoiding non-core asset uncertainties and complex regulatory processes. The offer enjoys full equity backing (from the Ellison family and RedBird Capital) and committed debt financing (Bank of America, Citi, and Apollo), ensuring strong funding.
Strategic Synergies and Industry Reshaping Ellison highlighted that a Paramount-Warner merger would create a stronger Hollywood studio powerhouse benefiting both creative communities and theatrical industries. The combined entity would boast larger content budgets, enhanced theatrical distribution, and a more profitable direct-to-consumer platform combining Paramount+ and HBO Max. The deal also promises technological upgrades through Oracle's partnership and integration of major global sports broadcasting rights. Paramount projects over $6 billion in cost synergies, positioning it more competitively against Netflix, Amazon, and Disney. A former Warner Bros. CEO noted selling to Netflix would effectively reduce Hollywood competition, indirectly validating Paramount's proposal for maintaining industry diversity.
Regulatory Hurdles and Political Dynamics While mergers typically fall under independent regulators like the FTC, this transaction has drawn attention from the highest executive levels. The President expressed skepticism about Netflix's approval prospects, citing its already substantial market share that would "increase significantly" with Warner Bros. Discovery. He plans to consult economists before any approval decision, intensifying market concerns about Netflix facing prolonged global antitrust challenges. Notably, the Ellison family's closer ties to the current administration compared to Netflix's perceived Obama-era affiliations may become an implicit factor influencing the deal's trajectory.
Wall Street Questions Netflix's Logic Beyond regulatory pressures, Netflix's acquisition rationale faces skepticism from sell-side analysts. Barclays questions why Netflix would spend nearly $80 billion to acquire a traditional studio it has already "disrupted" through streaming, noting projected cost synergies of only $2-3 billion and slow integration due to existing content licensing agreements.
Meanwhile, Paramount wages a dual offensive in both public opinion and capital markets, attempting to convince Warner's board and shareholders that its all-cash offer represents the sole path to maximizing asset value. Unless Netflix can present more compelling countermeasures or address regulatory concerns, the scales may tip toward Paramount in this Hollywood megadeal battle.