Bidding War For Warner Between Netflix and Paramount Heats Up

The bidding war between Netflix and Paramount to take ownership of Warner Bros. Discovery has intensified, with both companies making major bids and an FTC decision looming in the distance.

In June, Warner Bros. Discovery (WBD) confirmed that the company would split into two independent corporations, Warner Bros. and Discovery Global. Warner Bros. would encompass the studios and streaming portion of the company, including HBO, while Discovery Global would possess most of their live channels like CBS, TNT, and HGTV.

However, soon after, Paramount offered a deal of $24 a share, or around $60 billion total, for the entire company. WBD rejected the deal, saying the offer was too low, but it began a bidding war after the company also piqued the interest of Netflix.

Then, last Friday, Netflix gave WBD an offer of $82.7 billion for just the studios and streaming portion of the company– what would have become the new "Warner Bros." The boards of both companies agreed to the deal, and it was quickly finalized over the weekend.

Nevertheless, Paramount came back with a sky-high, hostile bid on Monday, proposing to give them $30 a share– a staggering $108.4 billion for the entire company. Paramount's offer includes studios, streaming, and the cable channels, making it tempting to WBD, but the board has maintained their word with Netflix. They have confirmed that they will respond within 10 business days, but according to their agreement with Netflix, they have a damages clause that forces them to pay $2.8 billion to Netflix if they accept Paramount's deal.

Paramount Skydance CEO David Ellison has asserted that their offer is not their best and it is already backed by major investment authorities in Saudi Arabia and Qatar along with the wealthy Ellison family, making them the clear choice. On the other hand, Netflix co-CEO Ted Sarandos has argued that a full takeover by Paramount would lead to $6 billion in cost-saving, which would result in major firing and job cuts at the company.

Despite these negotiations, many people believe that President Trump and his allegiances with both companies could likely come into play when determining which company will buy Warner. Each company will have their own antitrust concerns if they manage to score the deal– Netflix adding more streaming to their already-large portfolio is certain to draw scrutiny, and the merger of two multimedia giants like Paramount Skydance and Warner Bros. Discovery would also require approval from the Federal Trade Commission (FTC).

Additionally, Larry Ellison, the father of David Ellison and the CEO of cloud computing giant Oracle, happens to be a large donor to the Trump administration. After the smooth merger between Paramount and Skydance, two media giants, the public scrutinized the deal by claiming that the FTC had allowed it to go through because Ellison had convinced Trump to let it go. However, Republicans argued against this, claiming that the deal had never violated any antitrust laws in the first place.

Affinity Partners, a private equity firm founded by Trump's son-in-law, Jared Kushner, has also confirmed that they are backing Paramount in their offer, raising additional suspicions.

Meanwhile, Trump has spoken highly of Sarandos, but established that there are antitrust concerns in their deal to buy Warner. Hollywood unions have also spoken out against the Netflix deal, claiming that a Netflix takeover would further decrease the company's already-declining number of theatrical releases.

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