Warner Bros. Picks Netflix Deal, Shuts down Paramount’s $108B Takeover Play

BBC, Business Insider, FOX Business, CNN, and the New York Times contributed to this report.

Warner Bros. Discovery has made its choice in Hollywood’s biggest corporate tug-of-war — and it’s siding with Netflix.

The company’s board has urged shareholders to reject Paramount Skydance’s massive $108.4 billion takeover bid, saying the offer is too risky and far less certain than the $72 billion deal Warner Bros. already struck with Netflix.

In a unanimous decision, the board said the Netflix agreement is simply the better bet for shareholders, despite Paramount claiming its all-cash offer was “superior.”

In a detailed filing with regulators, Warner Bros. Discovery said Paramount’s proposal comes with “numerous and significant risks,” especially around financing. While Paramount has touted backing from the billionaire Ellison family, Warner Bros. pushed back hard on the idea that the bid is fully guaranteed.

The board said the Ellisons — led by Oracle founder Larry Ellison and his son David — never provided a full, unconditional commitment to cover the deal if something went wrong.

By contrast, Warner Bros. described Netflix’s offer as fully financed, legally binding and backed by a company with a market value north of $400 billion and an investment-grade balance sheet.

Netflix didn’t waste time applauding the decision. Co-CEO Ted Sarandos called the merger agreement “superior” and said it offers clearer funding and less regulatory uncertainty.

Under the Netflix agreement announced Dec. 5, the streaming giant would buy Warner Bros.’ movie and TV studios along with HBO Max. That would give Netflix control of some of the most valuable entertainment brands in the world — including Harry Potter, DC Comics, Game of Thrones, Friends and The Sopranos.

Netflix isn’t interested in Warner Bros.’ traditional cable networks, though. If the deal goes through, Warner Bros. Discovery would spin off channels like CNN and TNT into a separate company before the sale is finalized.

Paramount’s bid, on the other hand, aims to buy everything — studios, streaming and TV networks — which could raise bigger antitrust concerns.

No matter who wins, regulators are expected to take a close look. Lawmakers have already warned that a Netflix-Warner merger could concentrate too much power in one company, limiting competition, consumer choice and jobs.

Some unions, including the Writers Guild of America, have also criticized consolidation plans, arguing they could lead to layoffs and lower wages.

President Donald Trump has hinted he wants a say in the approval process and has publicly criticized CNN, saying it should be sold — a comment that appears to favor Paramount’s approach.

Not necessarily.

Paramount could still raise its offer, extend its hostile bid to shareholders, or challenge the process legally. Its current tender offer is set to expire in early January, but analysts say the studio could come back with a sweeter deal.

For now, though, Warner Bros. Discovery is standing firm. The board says the Netflix deal offers more certainty, fewer financing questions and stronger long-term value — even if it’s smaller on paper.

One thing is already clear: Wall Street is winning big. Investment banks advising on the sale stand to collect roughly $225 million in fees, regardless of which deal ultimately crosses the finish line.

Hollywood’s takeover drama isn’t over yet — but Netflix is clearly in the lead.