Paramount counters Netflix with hostile bid for WBD
The battle for Hollywood's storied Warner Bros. studio escalated on Monday as Paramount launched a hostile all-cash bid to acquire Warner Bros. Discovery (WBD), directly challenging a previously announced $72 billion deal between the studio and streaming giant Netflix.
Paramount's offer, valued at $30 per share and totaling $108.4 billion, represents a 139% premium over WBD's September stock price of $12.54. The move comes amid a frenzy of corporate manoeuvring that has captivated Wall Street and the entertainment industry alike, pitting traditional media power against the streaming disruptor.
Paramount's bid includes WBD's cable channels - CNN, TNT, TBS, and Discovery - placing them under a company with close ties to President Donald Trump, whose ally Larry Ellison owns Paramount.
Netflix announced its agreement to acquire Warner Bros. last Friday, a decision that immediately sent shockwaves through Hollywood. Insiders described the deal as one of the largest media transactions of the decade, potentially reshaping the global entertainment landscape.
Sources familiar with Netflix's strategy told Reuters that the streaming platform initially entered the bidding on a fact-finding basis but quickly recognised the opportunity to integrate Warner Bros.' century-old content library, theatrical distribution, production units, and HBO Max streaming service into its operations.
"The content library is extremely valuable for streaming platforms," one source said. "Library titles can account for up to 80% of viewing. Coupling that with Warner Bros.' production and distribution infrastructure provides strategic advantages Netflix simply cannot achieve organically."
Warner Bros.' board convened daily for eight days leading up to Thursday's decision, weighing competing offers from Netflix, Paramount, and Comcast, the parent company of NBCUniversal. Paramount's counterbid was partly motivated by concerns about Netflix's dominance, with President Trump commenting that the streaming giant's control over a major studio "could be a problem," given its outsized share of the global film and television market.
David Ellison, chairman and CEO of Paramount, told CNBC, "We're really here to finish what we started," marking the sixth bid the company has made since the auction began. Paramount called Netflix's $83 billion offer "inferior and uncertain," emphasising that its all-cash bid provides greater regulatory certainty.
The deal would unite Paramount's assets, including Paramount Pictures, CBS, Nickelodeon, and Paramount+, with Warner Bros.' portfolio, while generating over $6 billion in cost savings and retaining theatrical releases - a sensitive issue in Hollywood, where many veterans consider cinema's prestige and financial ecosystem dependent on theatrical distribution.
Netflix, however, has defended its plan, offering a $5.8 billion breakup fee - among the largest in M&A history - to signal confidence ahead of expected regulatory scrutiny.
Executives and advisers, including Moelis & Company, Wells Fargo, and law firm Skadden, Arps, Slate, Meagher & Flom, reportedly worked through Thanksgiving to prepare the bid, with one executive noting they felt only a 50-50 chance of success until the deal was confirmed late Thursday night.
Paramount argued its merger would avoid some regulatory hurdles faced by Netflix, whose acquisition would give the company 43% of global streaming subscribers and likely trigger extensive international review.
Paramount also stressed that it would maintain content spending and theatrical releases, a key factor for industry veterans concerned about Netflix's previous reluctance to prioritise cinemas.
The stakes extend beyond financial and operational considerations; the deal is widely seen as a bellwether for Hollywood's future structure, blending legacy media with streaming dominance. Paramount pointed to Warner Bros.' iconic film legacy, which spans classics such as 'Casablanca' and 'Citizen Kane', as well as modern blockbuster franchises including 'The Sopranos', 'Game of Thrones', and the 'Harry Potter' films. The studio's rich catalogue of content and brand value remains a central factor in both Paramount and Netflix's bids.
The market reacted sharply to the news: Warner Bros. Discovery's share price surged more than 7% following Paramount's bid announcement, while Netflix shares fell over 2%, reflecting investor caution about escalating competition and potential regulatory challenges.
Analysts suggested that the outcome could set a precedent for future streaming and media consolidation, signalling either the rise of integrated content platforms or further fragmentation in the industry.
Netflix's executives reportedly downplayed speculation about acquiring a major studio as recently as October, but a series of strategic moves - including Warner Bros.' plan to split into two publicly traded companies, separating cable networks from studio and streaming assets - made the acquisition increasingly compelling.
Paramount's persistent pursuit, coupled with Comcast's competing interests, turned the process into a high-profile showdown, with daily board deliberations underscoring the intensity of the contest.
Paramount's latest bid highlights the influence of traditional media in shaping Hollywood's future. By emphasising regulatory certainty, content preservation, and theatrical releases, the company positions itself as the guardian of legacy industry norms while challenging Netflix's digital-first approach.
Netflix, meanwhile, emphasises the strategic advantages of integrating a vast content library with streaming infrastructure, aiming to accelerate subscriber growth and global market share.
As the battle continues, both companies have signalled readiness to escalate their bids. The industry watches closely, aware that the outcome could reshape not only studio ownership but also the economics, distribution strategies, and creative culture of Hollywood for decades to come.
For now, the contest remains unresolved, with Paramount pressing its all-cash offer and Netflix defending its $72 billion deal.