Warner Bros. Rejects $108bn Paramount Bid, Favoring Netflix Merger

In a major shift for the entertainment industry, the board of Warner Bros. Discovery (WBD) has unanimously recommended that shareholders reject a $108.4 billion takeover bid from Paramount-Skydance. Instead, the board is moving forward with a $72 billion deal to sell its film and streaming assets to Netflix.

Despite Paramount’s bid being significantly higher in cash value, WBD’s board cited "numerous and significant risks" regarding Paramount's proposal. The board expressed skepticism over the financial backing of the Ellison family and noted that the Netflix offer provides better long-term value and a clearer funding structure.

The two offers represent very different visions for the future of Warner Bros.: The Netflix Plan: Netflix aims to acquire only the Warner Bros. movie studio and HBO/Max, securing a massive content library including Harry Potter and Friends. Under this deal, WBD would be required to spin off its pay-TV channels (like CNN and TNT) into a separate entity.

The Paramount Plan: Backed by the Ellison family, Paramount sought to buy the company in its entirety. This would have merged WBD’s television networks with Paramount’s own assets (CBS, MTV, and Showtime).

The potential merger faces stiff opposition. The Writers Guild of America (WGA) has called for the deal to be blocked, warning of job cuts, lower wages, and reduced content for viewers. Regulators in the US and Europe are also expected to scrutinize the deal over concerns regarding market consolidation and reduced consumer choice.

Industry analysts suggest this "Succession-style" battle is far from over, as Paramount may still return with a revised offer to sway shareholders.