MW Even Paramount now thinks Netflix is winning the bidding war for Warner Bros. Discovery

By Lukas I. Alpert

Paramount said in a letter that it thinks WBD has been conducting an unfair bidding process that has put a thumb on the scale in favor of Netflix's bid

Paramount Skydance had been considered the front-runner in the bidding war for Warner Bros. Discovery, but signaled on Thursday that it felt it was losing to Netflix in a process it deemed unfair.

Paramount Skydance said it wanted to buy Warner Bros. Discovery in part to build a formidable streaming service that could compete with Netflix. But it may have pushed WBD into Netflix's arms instead.

Paramount $(PSKY)$ signaled Thursday that it believes it is losing the bidding war for the owner of HBO and CNN, accusing Warner Bros. Discovery (WBD) of conducting an unfair bidding process designed to tip the scales in favor of Netflix $(NFLX)$.

"It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder," Paramount wrote in a letter to the WBD board.

The letter cited media reports stating that WBD's management viewed a sale to Netflix as a "slam dunk," and that the WBD board had "really warmed to" making a deal with the streaming giant.

In response, Warner Bros. Discovery wrote back to Paramount assuring them "that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so."

The bidding war for WBD has heated up this week, following a deadline for second-round offers on Monday. Netflix, Paramount and Comcast $(CMCSA)$ all submitted amplified bids, but Netflix and Paramount had been considered the front-runners until Thursday, when Paramount signaled it felt its position was weakening.

Both Netflix and Paramount reportedly had offered all-cash bids, while Comcast's offer included a mix of cash and stock.

Shares of Netflix fell about 0.7% on Thursday toward an eight-month low, following a drop of over 6% on Wednesday after details of its all-cash bid for WBD emerged.

Paramount shares gained 1% on Thursday after a 7% decline on Wednesday. Warner Bros. Discovery shares slipped about 0.1% Thursday, following a rise of 1.3% on Wednesday.

Comcast's shares were down 0.8% on Thursday after rising 1.5% on Wednesday.

Paramount CEO David Ellison and his father, Larry Ellison, the co-founder of Oracle $(ORCL)$ and one of the richest people in the world, triggered what has emerged into a bidding war when they made an unsolicited offer to acquire WBD in September. The Ellisons' offer was rebuffed and they have made several increasingly higher bids since then, all of which have been rejected.

In October, Warner Bros. Discovery, which was already in the midst of spinning off its cable-television assets, said it was formally putting itself up for sale, opening the process up to all bidders.

Paramount had long been considered the front-runner as it has offered to buy all of WBD's properties, including its studio and streaming businesses plus its cable-television channels.

Netflix and Comcast are reportedly only interested in WBD's streaming service, studio business, and film and television libraries.

But the perceived strength of Netflix's all-cash offer had raised the odds of it winning the bidding in the eyes of media observers and investors.

The real value in the deal comes from WBD's studio, its library and its streaming business, which ranks fourth overall with 128 million subscribers worldwide.

An acquisition of Warner Bros. Discovery is considered more of a must-have for Paramount than for its competitors in the bidding, analysts have said, given the need to bolster its streaming service, Paramount+, which has 79.1 million subscribers globally.

Netflix, which is by far the streaming leader with over 300 million subscribers, would gladly add WBD's studio, library and streaming business, but it has little interest in the linear-television properties.

Comcast, which owns NBC and Universal Studios, and is close to completing a spinoff of much of its own linear television business into a new company called Versant, could benefit from the addition of WBD's studio and its streaming customers.

All variations of any transaction would require some level of regulatory approval, however, which observers have said gives Paramount an advantage. Larry Ellison is a backer of President Donald Trump, and David Ellison has made several changes to CBS, which is owned by Paramount, that have been viewed favorably by the Trump administration.

Earlier this year, Paramount agreed to settle a defamation lawsuit brought by Trump for $16 million that many legal experts considered to be baseless. Soon after the settlement was reached, the Federal Communications Commission signed off on the company's acquisition by the Ellisons' Skydance Media.

-Lukas I. Alpert

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December 04, 2025 19:21 ET (00:21 GMT)

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