The battle for Warner Bros. Discovery (WBD) intensified this week, with Netflix and Paramount Global locked in a high-stakes bidding war that has drawn in political scrutiny and raised questions about the future of media consolidation. The escalating contest, now entering its final stages, centers on control of one of Hollywood’s most valuable assets, encompassing iconic studios like Warner Bros. And HBO, and streaming platforms like Max.
Netflix, which initially proposed a deal valuing WBD’s studio and streaming assets at $82.7 billion, is facing a determined challenge from Paramount, backed by the Ellison family. Paramount has been pursuing a full takeover of WBD, offering a “ticking fee” to shareholders if the deal isn’t finalized by the end of the year, according to reports. The latest move underscores Paramount’s commitment to securing WBD, even as Netflix argues its proposal would be more beneficial to the entertainment industry.
Ted Sarandos, co-CEO of Netflix, defended the proposed acquisition, arguing it would foster growth rather than contraction. “We’re buying a movie studio and a distribution entity that we don’t currently have,” Sarandos told BBC Radio 4’s Today programme. He contrasted Netflix’s approach with Paramount’s, claiming the latter would implement $6 billion in cost cuts, potentially shrinking the industry. “This industry would be much smaller under that ownership than it would be under Netflix ownership,” he stated.
The bidding war has taken an unexpected turn with the intervention of former U.S. President Donald Trump. Trump publicly demanded that Netflix remove Susan Rice, a former U.S. Diplomat and current board member, citing her criticism of corporations that aligned with his administration. He threatened unspecified “consequences” if Netflix did not comply. Sarandos downplayed the political pressure, characterizing it as “a business deal, it’s not a political deal… He likes to do a lot of things on social media.”
The Department of Justice (DOJ) is currently investigating the potential antitrust implications of the Netflix deal, examining whether the merger could harm competition in content negotiations and impact creative talent markets. This regulatory scrutiny adds another layer of complexity to the already fraught negotiations. Netflix’s Sarandos has asserted the deal is “pro-consumer and pro-innovation,” a claim regulators will be tasked with evaluating.
Paramount’s bid, backed by a $40 billion personal guarantee from Oracle co-founder Larry Ellison, aims for a complete takeover of WBD, including its television networks, a strategy differing from Netflix’s focus on the studio and streaming assets. Critics of both proposals express concerns about excessive consolidation of media power. Sarandos argued that a Paramount takeover would mirror “classic, horizontal media mergers that are always bad for consumers, always bad for creators, because basically what they’re just taking is two studios and collapsing them into one.”
The proposed acquisition of WBD by Netflix has also sparked debate regarding its potential impact on the UK’s creative industries. Politicians have called for a competition review, fearing it could negatively affect consumers and the UK cinema industry. Sarandos sought to allay these concerns, emphasizing Netflix’s significant investment in British content. “Our teams here are 100% British,” he said, highlighting the company’s 59 ongoing productions in the UK, with the majority being British projects. He pointed to the success of British series like Baby Reindeer and Adolescence as evidence of Netflix’s commitment to supporting British storytelling.
WBD shareholders are scheduled to vote on the Netflix deal on . Paramount has until the end of , to submit its final offer. The outcome of this bidding war will not only determine the fate of Warner Bros. Discovery but also reshape the competitive landscape of the global entertainment industry, with significant implications for consumers, creators, and the future of media.
The stakes are particularly high given the evolving dynamics of the streaming market. Netflix, while a dominant player, faces increasing competition from rivals like Disney+ and Amazon Prime Video. Acquiring WBD’s assets would significantly bolster Netflix’s content library and strengthen its position in the increasingly crowded streaming space. Paramount, meanwhile, is seeking to scale up its streaming service, Paramount+, and believes acquiring WBD would provide the necessary resources and content to compete effectively.
The situation remains fluid, and the final outcome is far from certain. The DOJ’s investigation, shareholder votes, and potential further interventions – political or otherwise – will all play a crucial role in determining whether Netflix or Paramount ultimately prevails in this blockbuster battle for control of Warner Bros. Discovery.
