Warner Bros. Discovery said Wednesday that it has again rejected a hostile takeover proposal from Paramount and is urging shareholders to back a rival agreement with Netflix to purchase Warner’s studio and streaming assets. Warner said its board views Paramount’s proposal as effectively a leveraged buyout, warning that the offer would rely on substantial debt and includes operating restrictions that could limit the company’s ability to perform while a transaction is underway.
In a letter to shareholders, board chair Samuel Di Piazza Jr. said the Netflix agreement provides “superior value” and greater certainty. Paramount did not immediately respond publicly. Its offer remains open because it was launched as a hostile bid, meaning Warner investors can decide directly whether to tender shares. Shareholders currently have until Jan. 21 to participate.
Two Competing Bids Target Different Pieces Of Warner
The contest is complicated by the fact that the bidders are seeking different assets. Netflix has proposed acquiring only Warner’s studio and streaming business, including legacy television and film production operations and platforms such as HBO Max. Paramount—owned by Skydance—is seeking the entire company, which would also bring Warner’s cable and news properties under the same roof, including networks such as CNN and Discovery.
If Netflix completes its purchase, Warner’s news and cable operations would be separated into a standalone company under a previously announced plan. Warner, in pushing back on Paramount, said the hostile offer’s proposed restrictions could “hamper” the company’s ability to operate through what it expects would be a lengthy review process.
Financing Sweeteners And A Lengthy Regulatory Road
Paramount has sought to reinforce its bid with additional assurances. Late last month, it announced an “irrevocable personal guarantee” from Larry Ellison, the Oracle founder and father of Paramount CEO David Ellison, to back $40.4 billion in equity financing. Paramount also increased the payout it would owe shareholders if regulators block the deal to $5.8 billion, matching the breakup-fee figure associated with Netflix’s proposal.
No matter which bidder prevails, a transaction is expected to face intense antitrust scrutiny. Warner and AP reporting have indicated that review by the U.S. Justice Department is likely, and other jurisdictions could also examine the deal. AP reporting has also highlighted politics as a factor: President Donald Trump has made unusual suggestions about personal involvement in whether a merger would be approved.
In a separate analysis of the regulatory landscape, the AP noted that market definition will be a central theme. A narrower lens focused on paid streaming subscriptions could raise sharper competitive questions than a broader definition that includes online video platforms. The AP cited JustWatch data estimating Netflix at about 20% of the U.S. on-demand subscription market, compared with 13% for HBO Max and 7% for Paramount+. It also reported that Netflix’s market capitalization was around $430 billion in mid-December, versus about $70 billion for Warner and roughly $14 billion for Paramount, underscoring the scale gap regulators may weigh.
The same AP report cited Nielsen data showing YouTube with nearly 13% of viewership in the fall compared with 8% for Netflix, and quoted Northwestern University law professor Jim Speta as expecting bidders to argue that mergers are needed to compete with YouTube—an argument that can look more favorable if regulators define the market broadly.
Industry Groups Flag Potential Impact On Theaters
Industry groups have urged regulators to consider how further consolidation could affect consumers and workers. Cinema United, which says it represents more than 60,000 movie screens worldwide, told a congressional antitrust subcommittee Wednesday that it remains “deeply concerned” about Netflix acquiring Warner’s studio and streaming assets. The group pointed to Netflix’s history of prioritizing its online platform and said the deal could harm both moviegoers and people who work in theaters.
Cinema United said its concerns were “no less serious” for Paramount’s bid, warning that additional consolidation across the industry could result in job losses and less diversity in filmmaking. For shareholders, the near-term decision remains whether to follow Warner’s recommendation to support Netflix’s $72 billion deal for studio and streaming assets, or to tender into Paramount’s $77.9 billion hostile offer for the full company ahead of Jan. 21.
