Paramount's $108B Hostile Bid Challenges Netflix-WBD Deal

December 9, 2025 at 07:14 UTC

6 min read

Paramount, Warner Bros. Discovery, and Netflix logos with M&A deal graphics and antitrust theme

Key Points

Paramount Skydance launched a $108.4 billion all-cash hostile takeover bid for Warner Bros. Discovery, surpassing Netflix's $82.7 billion deal.
Netflix agreed to acquire Warner Bros.' studio and streaming assets, including HBO, in a deal valued at $72 billion in equity, pending regulatory approval.
Paramount's bid includes the entire Warner Bros. Discovery company, encompassing cable networks like CNN and TNT, and is backed by the Ellison family and partners including Jared Kushner and Saudi Arabia's Public Investment Fund.
Both deals face significant antitrust scrutiny, with President Donald Trump indicating involvement in the approval process and expressing concerns about market concentration.

Paramount's Hostile Bid and Its Strategic Rationale

Paramount Skydance, led by CEO David Ellison and backed by the billionaire Ellison family, made a $108.4 billion hostile takeover offer for all of Warner Bros. Discovery (WBD) on December 8, 2025. This all-cash bid values Warner Bros. Discovery at $30 per share and includes the company's entire portfolio, notably its traditional cable television networks such as CNN, TBS, TNT, and The Food Network. Paramount's offer exceeds Netflix's recently announced deal, which values Warner Bros.' studio and streaming assets at approximately $82.7 billion, including debt. Paramount argues that its bid provides superior value to shareholders, offering more cash upfront and a more certain and expedited path to completion. The company also contends that acquiring the full Warner Bros. Discovery entity, rather than just the streaming and studio assets, presents a more comprehensive and strategically advantageous combination. Paramount's bid is supported by significant financial backing, including an equity infusion from the Ellison family, private equity firm RedBird Capital, and outside investors such as Affinity Partners, led by Jared Kushner, and Saudi Arabia's Public Investment Fund. These investors have agreed to forgo governance rights in the combined entity. Paramount's CEO David Ellison has publicly criticized Warner Bros. Discovery's decision to pursue the Netflix deal, labeling it a "horrible deal for Hollywood" and expressing concerns that the planned spin-off of traditional networks would diminish shareholder value. Paramount's strategy aims to create a scaled competitor capable of challenging dominant streaming platforms and technology companies by combining Warner Bros.' extensive content library and cable assets with Paramount's existing media properties.

Netflix's Deal and Response to Paramount's Challenge

Netflix announced a deal on December 4, 2025, to acquire Warner Bros. Discovery's film, television, and streaming studio assets, including HBO and HBO Max, in a transaction valued at approximately $82.7 billion. The deal involves a combination of cash and Netflix stock, with a headline value of about $27.75 per Warner Bros. share, subject to adjustments related to spin-off net debt and a 21-month closing timeline. Netflix's offer excludes Warner Bros.' traditional cable networks, which are to be spun off into an independent company. Netflix executives, including co-CEOs Ted Sarandos and Greg Peters, have expressed confidence in the deal's completion and regulatory approval, emphasizing plans to maintain theatrical releases and create jobs within the U.S. entertainment industry. They have dismissed Paramount's hostile bid as "entirely expected" and underscored Netflix's position as a builder of original content rather than an acquirer. Netflix's strategy includes leveraging Warner Bros.' vast intellectual property, such as the DC Universe and Harry Potter franchises, to enhance its streaming offerings and solidify its market leadership. The company has agreed to pay a $5.8 billion breakup fee if the deal fails due to regulatory or other issues. Despite investor concerns over the deal's size and risk, Netflix remains committed to its acquisition plan, highlighting the potential to unlock value from Warner Bros.' content library and premium brands.

Regulatory and Political Challenges Facing Both Bids

Both the Netflix and Paramount bids for Warner Bros. Discovery are subject to intense regulatory scrutiny in the United States and Europe, with antitrust concerns at the forefront. Analysts and legal experts have noted that Netflix's acquisition of HBO Max and Warner Bros.' streaming services could raise significant competition issues due to Netflix's position as the largest streaming platform globally. Paramount's bid, which includes traditional cable networks and news outlets such as CNN, also raises concerns about market concentration, particularly in sports, children's programming, and news media. President Donald Trump has publicly indicated that he will be involved in the approval process for the Warner Bros. deal and has expressed reservations about the Netflix transaction, citing potential antitrust problems. Trump's connections to the Ellison family and Jared Kushner, both involved in Paramount's bid, add a political dimension to the regulatory review. Some analysts suggest that Trump's involvement could complicate or delay regulatory decisions, potentially benefiting Paramount. However, others warn that political interference might backfire, leading to prolonged legal challenges. Lawmakers from both parties have voiced concerns about the potential for reduced consumer choice and higher prices resulting from media consolidation. The ultimate outcome will depend on how regulators define the relevant market, with broader definitions including cable, broadcast TV, and platforms like YouTube potentially mitigating concentration concerns.

Implications for the Streaming Industry and Consumers

The competing bids for Warner Bros. Discovery represent a pivotal moment in the evolving streaming and media landscape. Should Netflix's acquisition succeed, it would consolidate its position as the world's largest streaming service, combining its over 300 million subscribers with HBO Max's approximately 128 million, creating a dominant player with an extensive content library including franchises like Harry Potter, DC Comics, and premium HBO programming. This consolidation could lead to fewer streaming options for consumers, potentially exacerbating concerns about subscription fatigue and pricing. Conversely, Paramount's bid aims to create a diversified media conglomerate combining Warner Bros.' assets with Paramount's existing networks such as CBS, Nickelodeon, and Comedy Central. This merger could offer scale advantages and cost synergies but also raises questions about the future of traditional pay-TV networks amid industry shifts toward streaming. Both deals face skepticism from industry stakeholders, including creators, unions, and theater owners, who worry about the impact on content diversity, employment, and theatrical distribution. Paramount CEO David Ellison has argued that Netflix's deal would create unprecedented market power detrimental to Hollywood, while Netflix executives have pledged to maintain theatrical releases and protect jobs. The outcome of this bidding war and regulatory review will significantly influence the competitive dynamics of the streaming sector, content availability, and consumer pricing in the coming years.

Key Takeaways

Paramount's $108.4 billion all-cash hostile bid for Warner Bros. Discovery challenges Netflix's $82.7 billion deal, offering full company control including cable networks.
Netflix remains confident in closing its deal for Warner Bros.' studio and streaming assets, emphasizing content integration and job creation despite regulatory hurdles.
Both bids face significant antitrust scrutiny, with political factors, including President Trump's involvement, adding complexity to the approval process.