What to know about Paramount’s hostile bid for Warner Bros. Discovery

Paramount Challenges Netflix’s Warner Bros. Discovery Deal with Higher Offer

Warner Bros. Discovery’s recently announced agreement to sell itself to Netflix has been upended by a surprise competitive bid from Paramount. The entertainment giant has made Warner shareholders a higher offer, setting the stage for what industry analysts expect to be a prolonged battle in the latest chapter of media industry consolidation.

The competing bids emerged after Warner agreed last week to be acquired by Netflix for $72 billion. Paramount has now countered with a bid valued at approximately $74.4 billion, or $30 per share in cash, going directly to Warner shareholders with its proposal.

“Whichever media company, if any, ultimately secures Warner, controls the calculus of the streaming wars and so much more,” said Mike Proulx, vice president and research director at research firm Forrester.

The stakes are particularly high as each company brings valuable entertainment properties to the table. Netflix offers its vast global library including hit originals like “Stranger Things” and “Squid Game,” while Paramount owns its Hollywood studio and major television networks including CBS and MTV. Both companies are eager to acquire Warner’s impressive portfolio, which includes Warner Bros. Pictures, HBO, and lucrative franchises like Harry Potter.

Warner Bros. Discovery CEO David Zaslav has reportedly been seeking offers for the company since at least October, when he indicated openness to selling all or parts of the business. According to Paramount, the company submitted six proposals to Warner over a 12-week period before its offer was rejected in favor of Netflix’s bid.

Unlike Netflix, Paramount’s offer includes Warner’s cable assets, which Netflix excluded from its proposal. Paramount CEO Larry Ellison claims their offer is worth approximately $18 billion more in cash than Netflix’s cash-and-stock bid. The Paramount deal includes financial backing from several high-profile investors, including Jared Kushner and funds controlled by the governments of Saudi Arabia and Qatar, according to regulatory filings.

Netflix’s offer values Warner at $72 billion, excluding debt, with a combination of cash and stock valued at $27.75 per Warner share. However, Netflix’s bid excludes Warner-owned networks such as CNN and Discovery.

Matthew Dolgin, senior equity analyst at research firm Morningstar, believes the competing bid makes it increasingly likely that Warner will eventually be acquired. “With Paramount now also being involved formally with an offer to shareholders, it’s even more likely to us that Warner gets acquired, because it’s no longer a single decision that may or may not hinge on regulatory approval,” Dolgin noted.

Warner shareholders have until January 8, 2026, to vote on Paramount’s tender offer, creating a potentially lengthy timeline for this corporate battle.

Another significant factor in this high-stakes media merger is potential regulatory scrutiny. President Donald Trump has already commented on the situation, stating that the Netflix-Warner deal “could be a problem” due to the combined market share. Trump indicated he would be involved in the federal government’s decision on whether to approve the deal.

It’s worth noting that Paramount’s CEO is the son of Oracle founder Larry Ellison, a known Trump ally. Federal regulators under the Trump administration previously approved Paramount’s $8 billion merger with Skydance in July.

Regulatory concerns differ between the two proposals. With Netflix’s offer, state or federal regulators may be most concerned about the massive size of a combined Netflix-Warner subscription service, given Netflix’s position as the world’s largest streaming platform. The Paramount deal raises fewer concerns in this area due to its smaller streaming service and limited international presence compared to Netflix. However, regulators might scrutinize the combination of Paramount and Warner film and television studios, given the already consolidated nature of major studios.

This potential merger follows a pattern of media acquisitions as the streaming landscape matures. Warner Bros. Discovery itself was formed in 2022 when telecom giant AT&T spun off and combined its WarnerMedia operations with Discovery. Other significant industry consolidations include Amazon’s 2021 purchase of MGM and Disney’s acquisition of Fox’s entertainment assets in 2019.

“Technology always faces this pattern of startups, lots of different players, legacy companies getting in on the action, and then ultimately lots of consolidation,” explained Forrester’s Proulx. “And this is the state that we’re in right now in the streaming wars saga, and in 2026 we’ll see continued consolidation.”