In a dramatic escalation of the battle for control of major Hollywood assets, streaming titan Netflix is preparing to overhaul its takeover bid for Warner Bros Discovery (WBD). The company plans to switch to an all-cash offer worth approximately $83 billion (£62 billion) in an attempt to accelerate the deal and see off a competing hostile bid from media rival Paramount.
Streaming Giant Seeks to Speed Up Acquisition
According to reports from Bloomberg, the revised financial structure is designed to make the acquisition more attractive to WBD shareholders and hasten a conclusion to a process expected to take several months. The move comes as Paramount, controlled by the billionaire Ellison family, aggressively pursues its own $108.4 billion takeover attempt for WBD. Paramount's bid is notably backstopped by a personal $40 billion guarantee from Larry Ellison, the co-founder of Oracle.
Warner Bros Discovery formally entered a sale process in October following interest from multiple suitors. After receiving bids from Paramount and Comcast—the owner of Universal Studios, NBC, and Sky—WBD agreed to a deal with Netflix in early December. However, Paramount has since launched repeated attempts to overturn that agreement and secure WBD for itself.
Political and Industry Backlash Over Market Dominance
The proposed union between Netflix and WBD has not been without controversy. Significant concerns have been voiced by US politicians and entertainment industry figures regarding the potential market power of the combined entity. Critics warn that the merger would create a media behemoth controlling almost half of the entire streaming market.
Under the terms of the Netflix deal, the streaming service's vast content library would be bolstered by control of WBD's crown jewels. These prized assets include the legendary Warner Bros studio, home to franchises like Harry Potter, Superman, and Batman, as well as the premium cable network HBO, producer of acclaimed series such as Game of Thrones, The White Lotus, and Succession.
A Complex Corporate Battle Intensifies
The corporate showdown is set to intensify. Paramount is planning to nominate directors to WBD's board specifically to vote against the Netflix agreement. For its part, WBD's board has previously advised shareholders to reject Paramount's "inadequate" hostile bid, arguing it relies too heavily on debt financing.
The original Netflix offer involved a mix of cash and stock. Shareholders were set to receive $23.25 per share in cash, plus stock in Netflix and equity in the parts of WBD not being acquired—specifically its global networks operation, which includes CNN, the Cartoon Network, and the Discovery Channel. The shift to an all-cash proposal simplifies this structure.
Market reaction to the news of Netflix's revised plans was positive. On Tuesday, WBD shares closed 1.6% higher, while Netflix's stock also saw a 1% rise. The outcome of this high-stakes bidding war will have profound implications for the future of entertainment, content ownership, and competition in the global streaming industry.
