Warner Bros. Backs Netflix, Rejects Paramount Bid

December 17, 2025 at 19:47 UTC

4 min read

Warner Bros., Netflix, and Paramount logos highlight media M&A with $108B Paramount bid rejected

Key Points

Warner Bros. Discovery’s board has rejected Paramount Skydance’s $108.4 billion hostile bid
The board is urging shareholders to support an existing merger deal with Netflix instead
Warner Bros. says Paramount “misled” investors about Ellison family financing and calls the bid “illusory”
Both rival offers would reshape Hollywood and face intense regulatory scrutiny

Board sides with Netflix in high‑stakes takeover battle

Warner Bros. Discovery has formally rejected Paramount Skydance’s $108.4 billion hostile takeover bid and is urging shareholders not to tender their shares into the offer. In a detailed letter and regulatory filing released Wednesday, the board said Paramount’s $30‑per‑share, all‑cash proposal is “not in the best interests” of the company or its investors and does not qualify as a “Superior Proposal” under Warner Bros.’ existing merger agreement with Netflix. Instead, directors are unanimously backing the previously announced deal under which Netflix will acquire Warner Bros.’ film and television studios, content library and streaming operations, including HBO and HBO Max, in a transaction valued at about $72 billion, or $27.75 per share. The board described the Netflix agreement as a binding, fully financed merger supported by robust debt commitments and no need for equity financing.

Financing doubts and ‘illusory’ backstop at heart of rejection

A central reason cited for rejecting Paramount Skydance’s bid is concern over how the offer would be funded. Warner Bros. said Paramount has “consistently misled” shareholders by claiming its proposal is fully “backstopped” by the Ellison family, led by Oracle CEO Larry Ellison. According to the board, “It does not, and never has.” Instead, the equity portion of roughly $40–41 billion relies on an “unknown and opaque” Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and can be changed at any time. The board argued that a revocable trust is no substitute for a direct, unconditional commitment from a controlling shareholder and warned that even in a willful breach, the trust’s liability would be capped at about 7% of its commitment. Warner Bros. also highlighted that Paramount Skydance’s own market value is about $15 billion and that its credit rating is at or near junk status, in contrast with Netflix’s investment‑grade balance sheet and market capitalization above $400 billion.

Competing deal structures and regulatory risk

The two bids differ sharply in scope and structure. Netflix is offering a mix of cash and stock for Warner Bros.’ studios, library and streaming assets, but is not acquiring cable networks such as CNN, Discovery and TNT. Those operations would be separated into a new entity before closing. Paramount Skydance, by contrast, is seeking to buy all of Warner Bros. Discovery, including its cable news and sports channels, and has touted its $30‑per‑share cash offer as superior in headline value and cleaner from a regulatory standpoint. Warner Bros.’ board, after consulting advisers, said it sees no material difference in regulatory risk between the two transactions and pointed to Netflix’s higher reverse break‑up fee as evidence of its confidence in securing approvals. Both potential combinations are expected to draw intense scrutiny from U.S. regulators because they would significantly alter the competitive landscape in streaming, film production and, in Paramount’s case, television news.

Investor, political and market reactions

Paramount Skydance has taken its case directly to Warner Bros. shareholders, insisting its financing is “air‑tight” and that the Ellisons will stand behind the bid, even as one financial partner, Jared Kushner’s Affinity Partners, has withdrawn from the consortium. Sovereign wealth funds from Saudi Arabia, Abu Dhabi and Qatar remain listed as backers in regulatory filings, a factor that has drawn national security questions from some lawmakers. Warner Bros. countered that Paramount’s tender offer is “illusory,” noting that it can be amended or terminated at any time and, if it failed, would leave Warner Bros. on the hook for a $2.8 billion break‑up fee owed to Netflix plus additional financing costs. Netflix welcomed the board’s stance, saying the merger agreement is “superior” and in the best interests of stockholders. In early trading Wednesday, Warner Bros. shares traded below Paramount’s $30 offer, while Netflix stock rose as investors weighed the increased likelihood that its deal will proceed. A shareholder vote on the Netflix transaction is expected in the spring or early summer, and Paramount has signaled it may continue trying to win support from investors.

Key Takeaways

Warner Bros. directors view deal certainty and financing transparency as more important than Paramount’s higher headline price.
Concerns over the Ellison family’s indirect, revocable‑trust backing have become a decisive weakness in Paramount Skydance’s bid.
The outcome will influence not only who controls Warner Bros.’ content library but also how far consolidation in streaming and legacy media can go under current regulators.