Paramount Skydance has reportedly escalated its pursuit of Warner Bros Discovery by submitting a higher offer, intensifying efforts to disrupt a potential deal between the HBO Max owner and streaming giant Netflix. According to a source familiar with the matter, the improved bid specifically aims to address Warner Bros' concerns about financing certainty, highlighting the fierce competition for coveted Hollywood assets including the Harry Potter and Game of Thrones franchises.
Revised Bid Details and Competitive Landscape
The specifics of the revised bid were not immediately clear, with both Warner Bros and Paramount declining to comment, and Netflix unavailable for response. Paramount's initial offer stood at $108.4 billion, or $30 per share, for the entire company. In contrast, Netflix has offered to buy the studios and streaming assets for $27.75 per share in cash, totaling $82.7 billion, and is permitted to match Paramount's latest bid led by David Ellison.
Financial Backing and Shareholder Dynamics
Netflix possesses ample cash reserves and could potentially increase its offer for the HBO Max owner, while Paramount's rival bid is backed by Oracle billionaire Larry Ellison. Paramount was instructed to submit its "best and final offer" after Warner Bros rejected an enhanced proposal that included paying a $2.8 billion termination fee to Netflix and adding a 25-cent per share quarterly "ticking fee" from next year to compensate shareholders for any deal closure delays.
Warner Bros had previously stated that Paramount's February 10 offer still fell short of what its board would consider a superior proposal, setting a seven-day deadline until February 23 for a revised submission. Analysts from MoffettNathanson suggested that an offer around $34 per share from Paramount could end the bidding war and avoid further debate over Discovery Global's value.
Strategic Divisions and Shareholder Pressure
Warner Bros plans to spin off Discovery Global, which holds cable TV assets such as CNN and HGTV, with estimates valuing it between $1.33 and $6.86 per share. Netflix argues its offer provides added upside from this spinoff, claiming it will enhance strategic, operational, and financial flexibility. However, Paramount has dismissed the cable spinoff central to Netflix's offer as effectively worthless.
Warner Bros, led by David Zaslav, faces pressure from activist investor Ancora Capital, which built a roughly $200 million stake in the HBO owner and accused the company of failing to adequately engage with Paramount. The investor warned that if Warner Bros refuses to re-enter discussions with Paramount, it will vote against the Netflix deal and hold the board accountable during its annual meeting.
Regulatory Scrutiny and Approval Pathways
Warner Bros shareholders were set to decide the fate of Netflix's offer on March 20, a pivotal moment in the high-stakes bidding war for one of Hollywood's most iconic movie studios. Approval from investors would advance the deal, but it would still face intense scrutiny from U.S. and European competition authorities, who must assess whether combining Netflix's global streaming power with Warner Bros' century-old studio assets would reduce competition or limit consumer choice.
A bipartisan group of lawmakers has raised concerns about potential harm to consumers and creatives. Paramount claims it has already secured foreign-investment clearance in Germany and is in talks with antitrust regulators in the U.S., the European Union, and the UK, arguing it has a clearer path to regulatory approval than Netflix.
Market Impact and Consumer Concerns
Paramount's bid would create a studio larger than market leader Disney and fuse two major TV operators, which some Democratic senators argue would control "almost everything Americans watch on TV." It would also transfer control of CNN to the conservative-leaning Ellisons, following their acquisition of CBS News and installation of Bari Weiss as editor-in-chief.
For Netflix, a combination with HBO Max would establish it as the biggest global streaming player, with approximately half a billion subscribers. Co-CEO Ted Sarandos has expressed confidence in winning approval, stating the bid would benefit Hollywood by avoiding job cuts in an industry already impacted by fewer productions and uneven box-office returns.
Netflix has argued that combining its streaming service with HBO Max would lower costs for consumers through bundled offerings. However, its claim that it needs Warner Bros to compete with YouTube, America's most-watched TV distributor, is likely to face pushback from the Department of Justice, which is examining whether Netflix engaged in anti-competitive practices as part of its regulatory review.
