December 5, 2025 (Netflix) December 8, 2025 (Paramount)
Status
Pending
Since late 2025, Warner Bros. Discovery (WBD) has drawn multiple acquisition offers from several entertainment companies. On October 21, 2025, the WBD Board announced it would consider a "broad range of alternative options" to its previous plans of splitting the company in two. Netflix, Paramount Skydance, and Comcast all emerged as contenders and submitted rival bids by November 20, 2025. After a second round of bidding, Netflix was widely seen as the frontrunner by December 4, 2025. In response, Paramount Skydance questioned whether WBD was truly serving its shareholders' best interests.[1][2]
Netflix emerged victorious in the bidding war and announced its deal with WBD to acquire its streaming and studios division (which includes assets like Warner Bros., HBO Max, DC Entertainment, and the company's media library) for 27.75 per share in a joint cash-stock offer valuing the division at $72 billion in equity value and $82.7 billion in enterprise value. WBD's Global Linear Networks division will be spun off as Discovery Global in mid 2026. Reactions to the Netflix-WBD deal received mixed to negative reception, with many voicing concerns at how it would affect the entertainment industry. Within three days, Paramount Skydance submitted a rival bid for the entirety of Warner Bros. Discovery, on December 8, 2025. Paramount's offer values WBD at $108.4 billion at $30 per share. The move has widely been viewed as a hostile takeover and WBD said it would take several weeks to review it, while also evaluating its previous agreement with Netflix.[3]
Background
In September 2025, David Ellison, the chief executive of the recently mergedParamount Skydance, held a board meeting to discuss the acquisition of Warner Bros. Discovery (WBD) so the new company could better compete against Amazon, Disney, and Netflix, Inc. A few days later, he visited WBD CEO David Zaslav's home to propose a $19 per share cash and stock bid, formalized a few days later in a letter that set the cash proponent at 60% At the time, Zaslav was in the planning to split WBD into a movie studios and streaming company and a television network business and WBD refused the deal. At the end of the month, the Paramount deal was bumped up to $22 per share with 67% cash, a $2 billion payment if it did not pass regulatory review, and a proposal for Zaslav to stay as co-CEO and co-chairman of the new company. A third offer on October 13 further increased it to $23.50 per share and 80% cash, to no avail.[4]
After Paramount's three failed attempts, talks of a potential sale of WBD began circulating, and the company announced it was reviewing strategic alternatives after receiving "unsolicited interest" from multiple parties.[5] Early public reporting identified three major potential bidders: Netflix, Inc. (which also own the DC Entertainment's rival Millarworld), Comcast (through its NBCUniversal media subsidiary), and the newly formed Paramount Skydance (which hold several networks previously owned by Warner such as MTV, Nickelodeon, The Movie Channel, VH1, Comedy Central and BET; Paramount and Warner both own their respective stakes at The CW).[5] In the first round of non-binding proposals, WBD reportedly received an offer from Paramount Skydance that would acquire the entire company (including its cable networks), but the board rejected that bid as inadequate.[6][7][8] According to The Wall Street Journal, Paramount's first round bid was $25.50 per share for the whole company, while the Netflix and Comcast offers only sought the studios and HBO Max.[4]
After rejecting the initial offer, WBD opened a broader auction. By late November 2025, binding second-round bids had been submitted by Netflix, Paramount Skydance and Comcast. According to sources familiar with the process, Netflix submitted a mostly cash offer of roughly US$28 per share for WBD's studio and streaming assets, a bid that outpaced Paramount's competing offer (around US$27 per share), though the two offers were not directly comparable because Paramount's bid covered the full company, including cable networks. According to The Wall Street Journal, Paramount's second-round bid was an all-cash $26.50 per share offer.[4]
As the process moved to a final decision, Paramount Skydance sent a letter to WBD's CEO alleging that the sale had become "tilted" in favor of Netflix. The letter claimed that the board had embarked on "a myopic process with a predetermined outcome," pointing to alleged conflicts of interest and questioning whether the auction remained fair.[9] According to The Wall Street Journal, Paramount's final offer was $30 per share, all-cash, and it had secured arrangement from its three Middle Eastern sovereign wealth backers to not take board seats that would trigger increased regulatory review.[4]
Despite those objections, on December 5, 2025, multiple outlets reported that Netflix had prevailed in the bidding war and entered exclusive negotiations with WBD to acquire its studio and streaming business. The announced deal values Warner Bros. Discovery at US$82.7 billion enterprise value (US$72.0 billion equity value), and prices post-split Warner Bros. shares at US$27.75.[10]
U.S. streaming market share in 2024. Analysts have estimated that the merged entity could control well over a third of the U.S. streaming market.[11][12]
If WBD accepts Paramount Skydance's offer, it will have to pay Netflix a $2.8 billion break up fee and if the current deal falls through, Netflix will have to pay WBD a $5.8 billion break up fee.[13] The latter is among the biggest break up fees ever.[14] At 7-8% of the deal's total value, legal scholars speculate that the magnitude of the fee itself could possibly face legal scrutiny[15] since the Delaware courts have typically upheld break up fees of only 3-4%.[16]
Paramount's hostile takeover bid
In a letter regarding potential regulatory concerns, Paramount Skydance stated that a proposed transaction between Paramount and Warner Bros. Discovery (WBD) would likely be pro-competitive and could face a relatively smooth approval process from regulators. By contrast, Paramount argued that a merger between Netflix and WBD would face significant uncertainty and opposition from competition law enforcement agencies in the United States and internationally. Paramount noted that such a combination could reduce the number of films released in theaters, potentially accelerating the shift toward streaming and negatively affecting brick-and-mortar theaters. The letter also highlighted that the co-CEO of Netflix has referred to movie theaters as an "outdated" concept, suggesting that Netflix ownership of WBD could contribute to declining theatrical attendance. Additionally, Paramount observed that combining Netflix with HBO Max, the fourth-largest player in the subscription video-on-demand (SVOD) market, would result in a company controlling 43% of global SVOD subscribers, which could raise antitrust concerns under U.S. law and other international jurisdictions.[17]
The Wall Street Journal reported that after the Netflix deal was publicly announced, Larry Ellison, the father of Paramount Skydance CEO David Ellison, called President Donald Trump to argue that the deal would hurt competition. Before a hostile takeover bid was announced, David Ellison went to Washington DC and promised Trump administration officials that he would make big changes to CNN.[4]
On December 8, 2025, Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery, announcing an all-cash offer valued at $30 per share, representing roughly $108.4 billion in enterprise value. Equity would be $41 billion backstopped by the Ellison family, RedBird Capital, PIF, QIA, Affinity Partners, and $54 billion of debt from Bank of America, Citigroup and Apollo Global Management. Paramount Skydance claims their offer provides $18 billion more in cash than Netflix's offer. Paramount argued that the combination would create a stronger vertically integrated studio and streaming competitor, leveraging Warner Bros.' film and television assets alongside Paramount's broadcast and cable portfolio. Warner Bros. Discovery's board stated that it would review the proposal in accordance with its fiduciary duties. Paramount Skydance believes it gives more certainty to shareholders and says it can close the deal in a shorter time frame, around 10 to 12 months, compared to Netflix, which said it would take 12 to 18 months to close its deal.[18][3]
On December 9, 2025, the Warner Bros Discovery Board of Directors stated it would "carefully review and consider Paramount Skydance's offer in accordance with the terms of Warner Bros. Discovery's agreement with Netflix, Inc.," and intended to advise its shareholders of "the Board's recommendation regarding Paramount Skydance's tender offer within 10 business days". The Board of directors also advised Warner Bros. Discovery shareholders to "not to take any action at this time with respect to Paramount Skydance's proposal."[19]
Industry
Many theater-owners and exhibition-industry groups have expressed strong concern that the deal threatens the future of theatrical film distribution. Cinema United, one of the largest theater-owner trade associations, described the acquisition as an "unprecedented threat" to the global exhibition business. They argued that Netflix's historically streaming-first model may lead to fewer theatrical releases, reducing box-office revenue and endangering theaters, including small independent cinemas that are usually single-screen. Cinema United's leadership called on regulators to closely scrutinize the transaction, warning that a consolidation of this magnitude could "impact theatres from the biggest circuits to one-screen independents" worldwide and risk eliminating a significant portion of the annual domestic box office.[20][21]
The Directors Guild of America (DGA) reportedly expressed concerns over the merger, noting that a major consolidation could threaten competitive opportunities for talent and reduce diversification in studio and streaming-driven content.[22]
The Writers Guild of America (WGA) stated that the proposed Netflix–Warner Bros. merger "must be blocked", arguing that "the world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent."[23][21]
SAG-AFTRA expressed concern about the proposed Netflix–Warner Bros. transaction, stating that the deal "raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it." The union emphasized that any merger must lead to "more creation and more production, not less", and that such work must occur "in an environment of respect for the talent involved." SAG-AFTRA noted that its final position will depend on a "complete and thorough analysis" of the proposal, with particular focus on jobs and production commitments, and unlike some other guilds, it has not yet called for the merger to be blocked.[28]
James Cameron publicly threw his support behind Paramount Skydance in its bidding war for Warner Bros. Discovery, claiming that a Netflix takeover "would be a disaster" for the studio's long-term creative future. Cameron argued that Paramount's offer better protected WBD's legacy franchises, theatrical strategy, and filmmaker-driven culture, claiming the company had a proven track record of nurturing large-scale storytelling compared to Netflix's data-driven content model.[29]
Government
A consortium of prominent film-industry figures, described as "concerned feature film producers", sent an anonymous letter to members of the U.S. Congress (House and Senate), urging lawmakers to publicly oppose the Netflix–WBD deal and to push for "the highest level of antitrust scrutiny." Among the arguments in the letter: concern that Netflix's ownership of WBD's vast film/TV library and its streaming platform could give it disproportionate influence over both content creation and distribution; this could reduce competition, suppress creative diversity, and concentrate decision-making power over production, release strategy, and distribution in a single company.[30]
U.S. Senator Elizabeth Warren described a potential Netflix–Warner Bros. merger as an "anti-monopoly nightmare." She expressed concern that such a deal could create a single large media company controlling nearly half of the streaming market, potentially leading to higher subscription prices, fewer consumer choices, and risks for American workers. Warren also criticized the antitrust review process under the Trump administration, urging the Justice Department to enforce U.S. antitrust laws fairly and transparently.[31] Warren separately criticized a possible Paramount–WBD deal as a "five-alarm antitrust fire".[32] U.S. Senator Mike Lee stated that the proposed Netflix–Warner Bros. merger raises "a lot of antitrust red flags" and said that a congressional hearing on the deal is "almost certain". Republican Senator Roger Marshall of Kansas and Representative Darrell Issa of California also urged U.S. antitrust authorities to closely scrutinize the proposed merger, arguing that it could result in fewer films being released in theaters.[33]
Regulatory response
Due to the size of the acquisition, the deal is subject to review by competition authorities in major markets.[34][bettersourceneeded]
Netflix previously had limited presence in theatrical film distribution. With the acquisition of Warner Bros. Pictures, it gains production studios and major film franchises, allowing it to distribute films in theaters and access properties like the DC Universe and Harry Potter, enhancing its position in theatrical and global film markets. Netflix has been trying to get into the video-game business for a long time. The company acquired smaller studios and built a presence in mobile gaming, but never established a major footprint.[36] With this acquisition, Netflix becomes a major player in the video-game industry through Warner Bros. Games. The company acquires Warner Bros. Games studios including Rocksteady Studios, Avalanche Software, NetherRealm Studios, TT Games, and major franchises such as Hogwarts Legacy, Mortal Kombat, and the Lego games.[37][38]
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