The battle over Warner Bros. has officially become Hollywood’s nastiest corporate showdown. Just a few days after Netflix emerged as the winner of a takeover bid, Paramount Skydance has been hit again with a hostile offer, this time for $108.4 billion. This is an all-cash operation that will take over the entire Warner Bros. Discovery empire. What appeared to be a resolved situation suddenly became a high-stakes tug-of-war for the future of the industry.
Why Paramount’s surprise bid changes everything
Paramount’s offer of $30 per share is significantly higher than Netflix’s cash and stock offer of $27.75 and, importantly, targets the entire Warner Bros. Discovery portfolio, which includes film and television studios, HBO, HBO Max, and cable networks such as CNN, TNT and Discovery. In contrast, Netflix’s deal would split the cable network into a separate, publicly traded company focused on Warner Bros. Studios, HBO and streaming properties.
Paramount’s pitch is simple: more money, more certainty. The studio has told investors that the offer would give Warner Bros. shareholders $18 billion more in cash than Netflix’s bid and offer an easier path through regulators. “We believe our proposal will create a stronger Hollywood,” Paramount CEO David Ellison said in a statement, adding that the deal would provide “higher headline value, greater certainty of that value, greater regulatory certainty, and a pro-Hollywood, pro-consumer and pro-competition future.”
However, Warner Bros. Discovery’s board has no intention of breaking its deal with Netflix. Hours after Paramount announced its hostile takeover plan, Warner Bros. issued its own release “acknowledging receipt” of the unsolicited offer. The board said it would “carefully consider and consider” Paramount’s proposal in accordance with its agreement with Netflix, but reiterated that it “does not intend to change its recommendation” and advised shareholders “not to take any action at this time.” Under the agreement, the board is required to submit a recommendation within 10 business days.
Politics, money, and a storm of regulation
What elevates this story far beyond a simple bidding war is the political and economic web surrounding Paramount’s bid. The $30-per-share cash offer is backed by a powerful consortium called Affinity Partners, the investment firm run by Jared Kushner. Several Middle East sovereign wealth funds located in Saudi Arabia and Qatar. Limad Holding Company, Abu Dhabi. and a strong backstop from the Ellison family and Redbird Capital. Larry Ellison, who is said to have close ties to the White House, reportedly called President Trump after the Netflix deal was announced and argued that the deal would hurt competition.
Its proximity to political power has already sparked a backlash. “The Paramount Skydance-Warner Bros. merger is a big five antitrust move that our nation’s antitrust laws will prevent,” Sen. Elizabeth Warren said on Monday (via Reuters), adding that the hostile bid was “backed by Trump’s friends and associates… and raises serious questions about influence misappropriation, political favoritism and national security risks.”
Netflix doesn’t operate in a vacuum at all. Co-Chief Executive Officer Ted Sarandos has personally courted the president, and the company faces criticism from lawmakers and Hollywood unions worried about job cuts and higher consumer prices if it absorbs Warner Bros.’ studio and streaming platform.
At the UBS conference, Sarandos said Paramount’s move was “totally expected” before aiming for promised efficiencies. “In the proposal that Paramount was talking about today, the Ellisons were talking about $6 billion in synergies. Where do you think the synergies are going to come from? Layoffs? So we’re not cutting jobs. We’re creating jobs.”
Breakup fees, theatrical futures, and rising stakes
The financial stakes surrounding the Netflix deal make Paramount’s intervention even more combustible. If Warner Bros. accepts Paramount’s offer and exits Netflix, it would pay a $2.8 billion break-up fee, which would typically be absorbed by a new buyer. Meanwhile, Netflix has agreed to pay $5.8 billion if the deal falls apart or doesn’t receive regulatory approval.
The discussion quickly spread to the field of theater as well. On a conference call with investors, Ellison promised that if successful, the combined Paramount and Warner Bros. studio would release “more than 30 theatrical releases a year,” a commitment welcomed by some in the exhibition industry. He also cited opposition to the Netflix-Warner deal from groups like the Writers Guild of America and filmmakers like James Cameron and Jane Fonda, who argue that a potential merger would harm theatrical film culture.
In contrast, Netflix continues to champion flexible windows. Sarandos noted that the streamer has released about 30 movies in theaters this year, but stressed that long exclusivity periods are “not very consumer-friendly.” Industry voices have pushed back, pointing to the inconsistent history of Netflix’s broad theatrical releases and the potential for the combined strategy to significantly reduce the number of Warner Bros. films that will receive traditional theatrical releases.
Cinema United president and CEO Michael O’Leary issued one of his most stern warnings yet, declaring that “the negative impact of this acquisition will be felt from the largest theaters to single-screen independent theaters in small towns in the United States and around the world,” and claiming that Netflix’s business model “does not support theatrical showings.”
President Trump and behind-the-scenes political conflicts
President Trump echoed similar sentiments, saying the Netflix-WBD deal “could be problematic” given Netflix’s market share and hinting that he would be “personally involved” in the regulatory review. Reports suggest a more complex background. His son-in-law Jared Kushner’s investment firm is involved in a rival bid for Paramount, and longtime Trump ally Larry Ellison is said to be a major backer.
Trump has denied discussing the issue with Kushner, saying neither Netflix nor Paramount are “friends of mine,” but the aides’ involvement has raised concerns about a conflict of interest. The political entanglement only adds to the complexity for Warner Bros., which now has to choose between two very important buyers in a very tense environment.
What you need to know now
For investors, creators, and viewers, the payoff is simple. The future home of one of Hollywood’s biggest studios is suddenly back in action. Netflix hopes to solidify its dominance by adding a historic studio and deep well of IP to its streaming engine. Paramount promises a stronger theatrical vision and hopes to build a conglomerate powerhouse that can compete with Netflix, Disney and Amazon, while relying on global capital and political relationships to strengthen its case.
Stocks are already reacting, with Warner Bros. Discovery and Paramount rising and Netflix falling, but this story is far from over. The White House will feel pressure from many directions, with shareholders speaking and domestic and international regulators stepping in. One of the largest entertainment deals ever proposed is now a sprawling corporate saga with real implications for movie theaters, streaming platforms, and everyone who cares about where and how they watch movies and TV.
