Netflix and Paramount Clash Over Warner Bros
Hollywood is witnessing a high-stakes battle as Netflix and Paramount compete to acquire Warner Bros Discovery. The studio, famous for franchises like Harry Potter, Friends, and Superman, has become a prime target as media giants try to strengthen their content portfolios.
Paramount Skydance, backed by the billionaire Ellison family, has been courting Warner Bros for months. Their goal is to combine resources with the iconic studio as the company faces challenges in keeping up with Netflix and Disney.
Warner Bros initially rejected Paramount’s offers and announced a deal to sell its most valuable assets—the studio and streaming divisions—to Netflix. Undeterred, Paramount CEO David Ellison launched a hostile takeover bid, appealing directly to shareholders.
What Is a Hostile Takeover?
A hostile takeover occurs when a company tries to acquire another without management approval. Typically, the acquiring company makes a direct offer to the target company’s shareholders. This contrasts with a friendly takeover, where both boards and shareholders agree on the deal.
Paramount’s move came after it felt Netflix had not responded adequately to its latest proposals, according to official filings.
Comparing Netflix and Paramount’s Offers
Netflix is focusing on Warner Bros’ studio and streaming networks, leaving other parts of the company to become independent. Their offer values these holdings, including Warner Bros, New Line Cinema, and HBO Max, at $82.7 billion, including debt. Netflix is offering $27.75 per share in cash, an increase from its initial mixed-cash-and-stock proposal.
Paramount, however, wants control of the entire company, including its traditional pay-TV networks. The Ellison-backed offer values Warner Bros at $108.4 billion and proposes $30 per share in cash. Paramount also plans to cover the $2.8 billion breakup fee if the Netflix deal falls through. Analysts say this approach offers shareholders more certainty.
Why Warner Bros Is a Valuable Prize
Warner Bros has a century-long legacy and a vast content library. From classics like Casablanca and Looney Tunes to modern hits like Succession and Sex and the City, its catalog is unmatched. HBO’s reputation for high-quality television adds to its appeal.
For Netflix, acquiring Warner Bros’ studio and streaming divisions would boost its movie offerings and prevent rivals from gaining access to its content. Paramount seeks scale to compete with Netflix and Disney. Combining Warner Bros with Paramount would expand streaming subscribers to roughly 199 million and strengthen traditional networks like CBS, Nickelodeon, and Comedy Central.
What’s Next?
The fight over Warner Bros is far from over. Netflix has the backing of Warner Bros management for its studio and streaming deal, while Paramount’s hostile takeover could sway shareholders. Analysts predict this battle could reshape Hollywood’s streaming landscape.
