In a high-stakes battle for one of Hollywood's most iconic studios, Warner Bros. is formally advising its shareholders to reject a takeover offer from Paramount Skydance. The board is instead throwing its support behind a rival $72 billion acquisition bid from streaming titan Netflix.
The Board's Recommendation and Competing Offers
In a letter to shareholders on Wednesday, Warner Bros. leadership made its position clear. The company stated that a union with Netflix would provide greater value for consumers and growth for the company compared to the hostile bid from Paramount, which was taken directly to shareholders last week.
"We strongly believe that Netflix and Warner Bros. joining forces will offer consumers more choice and value, allow the creative community to reach even more audiences with our combined distribution, and fuel our long-term growth," the company said.
The financial terms of the two offers are a key point of contention. Paramount Skydance is offering $30 per Warner share, which surpasses the $27.75 per share offered by Netflix. However, the Warner Bros. board argues the strategic fit with Netflix is superior, citing Netflix's "deep portfolio of iconic franchises, expansive library, and strong studio capabilities" as ideal complements to its existing business.
Key Differences and a Hostile Path
The two proposals are structurally different. Paramount's bid seeks to acquire the entire Warner Bros. empire, including its influential cable networks like CNN and Discovery. Netflix's offer, however, is contingent on Warner Bros. first completing the separation of its cable operations, a plan previously announced by the studio.
This corporate drama turned hostile after Paramount claimed it made six different bids that were rejected by Warner's leadership. Only after Warner announced its deal with Netflix on December 5 did Paramount take its $30-per-share offer directly to Warner's shareholders, bypassing the board.
Despite the board's recommendation, the final decision rests with shareholders. They can still choose to tender their shares to Paramount, setting the stage for a potential shareholder vote that will determine the studio's future owner.
Regulatory Hurdles and Industry Reshaping
Beyond shareholder approval, both proposed acquisitions face immense regulatory scrutiny. A change in ownership at Warner Bros. would dramatically reshape the entertainment and media industry, impacting everything from film production and streaming services to cable news.
Critics of the Netflix deal warn that combining the streaming giant with Warner's HBO Max would create a service with overwhelming market dominance. In contrast, Paramount's streaming service, Paramount+, is far smaller. Meanwhile, Paramount's attempt to merge Warner's cable news assets with its own CBS News raises questions about media consolidation and editorial control, a concern highlighted by shifts at CBS following Skydance's $8 billion purchase of Paramount in August.
Politics are also entering the fray. U.S. President Donald Trump has already commented on the potential deals, suggesting regulatory approval could be influenced by political considerations. Trump previously stated Netflix's deal "could be a problem" due to market control concerns. The Republican president also has a noted close relationship with Oracle founder Larry Ellison, whose son runs Paramount and whose family trust is backing the bid for Warner.
The coming weeks will be critical as shareholders weigh their options and regulators examine the profound implications of either mega-deal for the future of entertainment.
