A dramatic turn in the entertainment industry unfolded this week as Warner Bros. issued a formal letter to its shareholders urging them to reject a hostile takeover offer from Paramount Skydance and to support a competing bid from Netflix.
The Board’s Stance
On Wednesday, Warner Bros. released a statement that the board had carefully reviewed Paramount Skydance’s most recent unsolicited tender offer. The company said it had applied “the same care and discipline it has applied throughout this process, including its review of multiple prior proposals.” The board’s evaluation, the statement added, followed a thorough and consistent process and is grounded in its fiduciary duties.
The letter clarified that Paramount had gone “hostile” last week, asking shareholders to reject the deal that the board favored, which would see Netflix acquire Warner Bros. Paramount is offering $30 per Warner share, compared with Netflix’s $27.75.
Shareholder Choice and Cable Assets
While the board’s letter indicates that the Paramount offer is not favored, it does not eliminate the possibility that shareholders could still tender their shares in favor of Paramount. Paramount’s bid would acquire the entire company, including its cable holdings such as CNN and Discovery. In contrast, Netflix’s offer does not include the purchase of Warner’s cable operations. If approved by regulators and shareholders, a Netflix acquisition would close only after Warner completes the previously announced separation of its cable business.
The board’s guidance also noted that Paramount had claimed it had made six different bids that Warner leadership rejected before announcing its deal with Netflix on December 5. Only after that did Paramount present its offer directly to Warner’s shareholders.
Regulatory Scrutiny and Industry Impact
Both takeover bids face intense regulatory scrutiny. A change in ownership at Warner would dramatically reshape the entertainment and media landscape, affecting movie production, consumer streaming platforms, and, in the case of Paramount, the news arena.
Critics of the Netflix deal argue that merging the massive streaming company with Warner’s HBO Max would give Netflix overwhelming market dominance, whereas Paramount+ is far smaller. Netflix co-CEOs Greg Peters and Ted Sarandos said in a filing through Warner Bros.:
> “This is something that we’ve heard for a long time-including when we started the streaming business… Our stance then and now is the same-we see this as a win for the entertainment industry, not the end of it.”
Both bids have raised alarms about potential effects on film and TV production. Netflix has agreed to uphold Paramount’s contractual obligations for theatrical releases, but critics point to its past business model and reliance on online releases.
Media Consolidation and Editorial Concerns
Paramount’s attempt to acquire Warner’s cable networks and news business would also bring CBS and CNN under the same roof, accelerating media consolidation and raising questions about editorial control. This concern is echoed by the experience at CBS News, both leading up to and following Skydance’s $8 billion purchase of Paramount, completed in August.
Paramount Skydance did not immediately respond to a request for comment from The Associated Press early Wednesday.
Political Dimensions
U.S. President Donald Trump has already been vocal about his future involvement in the deal, indicating that politics will play a role in regulatory approval. Trump previously said that Netflix’s deal “could be a problem” because of the potential for an outsized control of the market. The Republican president also has a close relationship with Oracle’s billionaire founder Larry Ellison-the father of Paramount’s CEO, whose family trust is also heavily backing the company’s bid to buy Warner.
Affinity Partners, an investment firm run by Trump’s son-in-law Jared Kushner, previously said it would invest in the Paramount deal, too. But on Tuesday, the firm announced that it would be dropping out of the bid.
Trump tends to make decisions based on gut and his personal mood. He has continued to publicly lash out at Paramount over editorial decisions at CBS’ “60 Minutes.” He wrote on his platform, Truth Social, on Tuesday:
> “For those people who think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before. If they are friends, I’d hate to see my enemies!”
Key Takeaways
- Warner Bros. urges shareholders to reject Paramount Skydance’s $30-per-share offer in favor of Netflix’s $27.75 bid.
- Paramount’s bid would include Warner’s cable assets; Netflix’s offer would not, pending completion of Warner’s cable separation.
- Both deals face intense regulatory scrutiny and could reshape the entertainment industry.
The unfolding battle between Paramount Skydance and Netflix highlights the complex interplay of corporate strategy, regulatory oversight, and political influence in today’s media landscape.
