A defining moment for Hollywood is unfolding as Netflix and Paramount Skydance race to acquire Warner Bros Discovery, one of the industry’s most influential entertainment conglomerates.
What began as a standard negotiation has evolved into a rare and openly contested takeover.
The outcome will determine the future of some of the most valuable film and television assets in the world — including Warner Bros Studios, DC Comics, CNN, and the entire HBO streaming ecosystem.
How the Warner Bros takeover was years in the making
Warner Bros Discovery has spent more than two decades navigating repeated structural overhauls. Since 2000, its parent organisations have undergone three major reorganisations driven by evolving market pressures and the rapid consolidation of legacy media firms.
The catalyst for the current battle came in early September, when Paramount Skydance began pursuing a potential combination with Warner Bros Discovery.
Although the company initiated talks privately, exchanges between Paramount CEO David Ellison and Warner Bros Discovery chief David Zaslav — according to a lengthy securities filing — stretched across several months, gradually escalating.
Paramount’s filing describes repeated attempts to secure a path forward, including multiple proposals adjusted to address Warner Bros Discovery’s concerns.
But despite these efforts, Warner Bros Discovery rejected several iterations of Paramount’s bid.
That set the stage for a dramatic turn in early December, when communication between both sides deteriorated sharply, ultimately prompting Paramount to launch a hostile takeover directly targeting Warner Bros Discovery shareholders.
Why Paramount launched a hostile takeover
Paramount’s regulatory filing offers one of the clearest accounts yet of why the company abandoned standard negotiation channels and pursued a more confrontational approach.
While discussions had progressed to the point where the Ellison family and Zaslav held a dinner meeting on November 24 to explore potential roles for Zaslav in a merged organisation, relations quickly cooled.
Paramount alleges that Warner Bros Discovery delayed the signing of a “clean team” agreement — a routine arrangement designed to allow the review of sensitive company data.
Without such an agreement, Paramount says it was unable to analyse critical financial and operational information. Its legal advisers cautioned Warner Bros Discovery’s representatives that prolonged delays would leave Paramount at a disadvantage.
Warner Bros Discovery Chairman Emeritus John Malone, who appeared on CNBC, according to Paramount, expressed support for Netflix’s involvement while commenting that Paramount had “interrupted” Warner Bros Discovery’s strategic separation plans.
Paramount cited this interview as further evidence of a process it believes was no longer neutral. The tone of communication worsened after Zaslav’s December 3 call to Ellison.
During the exchange, Zaslav relayed concerns from the Warner Bros Discovery board about the absence of a full financial guarantee from the Ellison family, a factor that the board believed could complicate the regulatory review process.
Although Paramount argues that multiple well-capitalised backers — including sovereign wealth funds — were already committed, the board was reportedly unconvinced.
Paramount says that on the afternoon of December 4, Ellison texted Zaslav after revising the company’s bid again. In the message, Ellison said, “I heard you on all your concerns and believe we have addressed them in our new proposal. Please give me a call back.”
When no reply came, Ellison sent a second message around 4 pm, stating, “It would be the honour of a lifetime to be your partner.” Paramount notes that these texts went unanswered.
By mid-day,
Paramount had also raised its offer to $30 per share — equivalent to a valuation of $108.4 billion — and informed Warner Bros Discovery that the bid was not its maximum.
But late that evening, reports emerged that Warner Bros Discovery had shifted into exclusive talks with Netflix regarding the sale of its studios and HBO-centred streaming business.
Two days later, Netflix and Warner Bros Discovery formally revealed their deal-in-progress. That announcement prompted Paramount to bypass Warner Bros Discovery’s management altogether and take its offer straight to shareholders.
How Paramount plans to succeed
Paramount’s approach is designed to exert pressure on Warner Bros Discovery by giving shareholders the opportunity to consider an alternative path.
The hostile tender, open for 20 business days and extendable, is built around an all-cash structure backed by the Ellison family, Affinity Partners — the investment firm led by US President Donald Trump’s son-in-law Jared Kushner — and multiple state-linked West Asian funds.
The company states that it has modified its financing framework specifically to avoid delays typically associated with national security reviews. Paramount says it removed Chinese firm Tencent from its investor group and obtained waivers from other foreign funders limiting their governance authority.
This structure, the company claims, should place the deal outside the jurisdiction of the Committee on Foreign Investment in the United States.
David Ellison, speaking Monday, framed the move as an effort to maximise returns for shareholders of both companies, declaring, “We’re here to fight for value for our shareholders and for WBD shareholders.”
Warner Bros Discovery responded with a brief statement defending its process, stating, “The board and the company have for months run a completely fair and transparent process with each of the bidders, and the bids speak for themselves.”
Regardless of the company’s official stance, its board must respond to Paramount’s takeover notice within 10 days — a decision that could influence the course of the bidding war.
How Netflix stepped in first
While Paramount was escalating its efforts to revive stalled negotiations, Netflix
had announced its own proposal to acquire Warner Bros Discovery.
The streaming giant, already the world’s most widely used subscription-based entertainment service, is preparing for what could be one of the most extensive antitrust reviews ever imposed on a media acquisition.
The bid
immediately drew the attention of Trump, who expressed doubt about the merger’s implications and indicated that he plans to involve himself in the decision.
During remarks on Sunday, he signalled uncertainty about the transaction’s merits but also made positive comments about Netflix chief Ted Sarandos, whom he met at the White House.
Trump said he has “a lot of respect” for Sarandos and praised his track record, saying, “Ted has really done a legendary job.”
However, he also hinted that consolidating HBO’s content under Netflix could raise concerns about concentration and market power.
In a separate development on Monday morning — shortly after Paramount revealed its direct-to-shareholders offer —
Trump denounced Paramount and its leadership on his Truth Social platform, attacking the company for allowing an interview featuring Representative Marjorie Taylor Greene.
For Netflix, the situation is strategically complex. Although Sarandos has maintained cordial ties with Trump since a private dinner at Mar-a-Lago in late 2024, segments of Trump’s base have called for the US Department of Justice to block the deal.
Influential conservative figures, including Steve Bannon and Matt Gaetz, criticised the merger shortly after it was announced, echoing arguments Trump himself used during the 2016-2017 AT&T-Time Warner review.
Despite these dynamics, Netflix remains confident. Sarandos responded to questions about Paramount’s hostile bid by saying it was “entirely expected,” and asserted that he believes the company can successfully close its own agreement with Warner Bros Discovery.
Netflix also offered a massive $5.8 billion breakup fee — one of the largest in corporate history — payable if the deal fails due to regulatory intervention.
Why the winner of Warner Bros will redefine Hollywood
If Paramount Skydance prevails, the merger would create a company with greater box-office influence than Disney across the US and Canada.
The addition of Warner Bros’ library — which includes everything from DC superheroes to HBO’s award-winning catalogue — would vastly expand Paramount’s content pipeline.
Paramount+ would also receive a substantial upgrade, acquiring access to some of the most critically acclaimed television of the past two decades, including long-running HBO franchises.
A Netflix-Warner Bros combination would unite the world’s largest streaming platform with one of the most prestigious content libraries in television history.
It would position Netflix to lead the next phase of streaming, especially as traditional cable audiences decline and global viewing fragments across platforms.
Netflix already commands a significant share of US TV streaming — roughly 8 per cent — while HBO Max and other major services contend with strong competition from rapidly expanding digital platforms.
Despite the attention on Netflix and Paramount, Alphabet’s YouTube remains the most dominant force in TV streaming, accounting for 12.9 per cent of viewership in the US.
Its blend of user-generated media, music, advertising, live programming, and subscriptions offers wider reach than any individual streaming service.
With nearly 2.9 billion global monthly active users this quarter — surpassing the combined totals of many premium platforms — YouTube’s scale reshapes the context in which both bidders must operate.
How the winner of Warner Bros will also inherit heavy debt
Any company purchasing Warner Bros Discovery must absorb a substantial debt load — approximately $35 billion accumulated largely as a result of the 2022 WarnerMedia-Discovery merger.
That limited the company’s flexibility to pursue new strategic initiatives and contributed to slower growth in certain areas of its business.
Paramount would assume roughly $30 billion of Warner Bros’ debt while Netflix would inherit around $10 billion.
The difference in assumed liabilities reflects the way each bidder intends to restructure and finance the business post-acquisition.
Paramount’s approach leans on the Ellison family’s financial backing and institutional co-investors, while Netflix is leveraging its strong market capitalisation and existing global subscription base.
Warner Bros Discovery’s stock performance shows how central the bidding war has become to the company’s financial trajectory.
Shares have more than doubled since hints of Paramount’s interest surfaced in September, and recent trading saw the stock close over 4 per cent higher after details of the sale process were made public.
With inputs from agencies
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