Warner Bros. Discovery announced that Paramount has increased its bid to acquire the company to $31 US per share, potentially sparking a new bidding war with Netflix for control of the Hollywood powerhouse. Initially, Paramount’s offer stood at $30 US per share when it made a direct bid to Warner stakeholders in December, shortly after Warner had agreed to sell its studio and streaming business to Netflix for $27.75 US per share.
Aside from raising the purchase price, Warner disclosed on Tuesday that Paramount has hiked its regulatory termination fee to $7 billion US. Additionally, Paramount has advanced a “ticking fee” promised to shareholders if the deal fails to close by the end of September, now set at 25 cents per share or $650 million US in total.
Following renewed discussions with Paramount, Warner confirmed receipt of an updated offer and is currently evaluating the proposal. Warner acknowledged that Paramount’s revised bid could potentially result in a superior offer under the existing agreement with Netflix, but Warner’s board has yet to make a definitive determination on the superiority of Paramount’s offer compared to Netflix’s bid.
Netflix declined to provide a comment when contacted on Tuesday afternoon.
The potential acquisition of Warner Bros. Discovery would significantly transform the landscape of Hollywood and the broader media industry, consolidating assets such as HBO Max, popular franchises like “Harry Potter,” and potentially CNN under a single entity depending on the outcome of the rivalry between Netflix and Paramount.
While Paramount aims to acquire Warner Bros. in its entirety, including networks like CNN and Discovery, Netflix is solely interested in the studio and streaming business of Warner. Warner’s board has consistently supported the deal with Netflix and reiterated its commitment to the agreement on Tuesday.
Should Warner’s board deem Paramount’s offer superior in the future, Netflix would have a four-day window to match or revise its bid or opt to withdraw from the bidding process.
In recent months, Paramount, Warner, and Netflix have engaged in intense negotiations to showcase the strengths of their respective proposals. However, concerns have been raised by lawmakers and industry groups about potential consolidation of power in an already concentrated industry, raising fears of job losses, reduced diversity in filmmaking, and increased costs for consumers.
Antitrust concerns loom large, and the fate of the Warner sale may hinge on regulatory approvals, with the U.S. Department of Justice already initiating reviews and other countries expected to follow suit.
Both Paramount and Netflix have defended their bids as beneficial for consumers and the industry at large, each presenting regulatory arguments to support their cases. Paramount has highlighted Netflix’s substantial market value, arguing that a merger with Warner would further solidify its dominance in the streaming space. In contrast, Netflix contends that it faces competition from broader video libraries like YouTube and pledges to uphold and expand Warner’s studios and distribution operations.
Political factors may also influence the outcome, with past statements from U.S. President Donald Trump suggesting involvement in the deal, particularly given connections to Paramount’s backers. Paramount’s bid comes on the heels of Skydance’s acquisition of Paramount, approved shortly after a settlement with Trump over a lawsuit involving CBS’ “60 Minutes.”
The editorial landscape could witness significant changes under new ownership, as seen in CBS with the appointment of Bari Weiss as editor-in-chief. The potential success of Paramount’s bid could lead to similar transformations at Warner’s CNN, although Trump has voiced criticism over editorial decisions at CBS’ “60 Minutes” and held discussions with Netflix’s leadership.
