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By Hugh Cameron and Toby Meyjes
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Warner Bros. Discovery's (WBD) Board of Directors has unanimously recommended shareholders reject a hostile $108 billion takeover bid from Paramount Skydance and advised them to back a previously agreed deal with Netflix instead.
In Wednesday’s announcement, WBD said Netflix’s offer represented "superior, more certain value for shareholders," and cited several potential issues with Paramount’s bid, including a failure to demonstrate secured financing and "additional costs" associated with terminating its existing agreement.
Newsweek contacted Paramount through its website for comment.
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Why It Matters
Netflix struck an $83 billion takeover of WBD’s TV and film studios in early December, potentially handing one of Hollywood's most prized assets to the streaming giant, before Paramount Skydance tabled a rival offer. The struggle has attracted significant attention given its potential to reshape the entertainment, streaming and journalism landscape, as well as scrutiny from many lawmakers who worry that either deal could weaken media competition in the U.S.
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What To Know
On December 8, Paramount launched an all-cash, $108.4 billion hostile takeover bid for the entirety of WBD, offering shareholders $30 per share, compared with Netflix’s $27.75 cash and stock blend.
Paramount CEO David Ellison, son of Oracle founder and Chairman Larry Ellison, said his company’s offer provided significantly more value to shareholders and greater regulatory certainty, but WBD disputed these notions in its letter to shareholders on Wednesday.
"Following a careful evaluation of Paramount's recently launched tender offer, the board concluded that the offer's value is inadequate, with significant risks and costs imposed on our shareholders," said Samuel A. Di Piazza, Jr., chair of the WBD Board of Directors. "This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals."
"We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination," he added.
It comes after Jared Kushner’s private equity firm withdrew its backing for Paramount Skydance’s hostile takeover. Affinity Partners, the Miami-based company founded by the president’s son-in-law, was one of several entities supporting the bid, alongside a handful of Gulf state wealth funds and the Ellisons themselves.
In Wednesday’s announcement, however, WBD said that Paramount had "consistently misled" shareholders in saying that its offer had a "full backstop" from the Ellison family.
"[Paramount’s] most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind," Wednesday’s letter read. "Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding."
The company went on to say that there was no "material difference in regulatory risk" between the two offers, and that abandoning the Netflix deal would lead to a $2.8 billion termination fee and other additional costs borne by shareholders.
Timothy Wu, a professor and antitrust expert at Columbia Law School, told Newsweek on Wednesday that either deal would draw "significant antitrust attention" from both federal and state regulators.
"While competition is a concern for both mergers, one thing important to understand is that some of the competition is labor competition—i.e., a concern that a merger will weaken the buying markets for TV shows and films," he continued. "For example, imagine a production company is selling the next ‘The White Lotus’—a merger of HBO and Netflix obviously reduces the number of serious buyers for that kind of work.
"The same goes for Paramount and Warner Brothers when it comes to broad-release Hollywood films."
WBD also called Paramount’s offer "illusory," and said that this could be terminated "at any time prior to its completion," citing the language used in the December 8 proposal.
"Additionally, [Paramount] contemplates $9 billion in synergies from the mergers of Paramount/Skydance and their offer for WBD," it added. "These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger."
What People Are Saying
Paramount, on announcing its offer to WBD: "Paramount's strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction, which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash."
Warner Bros. Discovery, in its letter to shareholders: "The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the [Paramount] offer with its regulatory advisors. The Board believes that each transaction is capable of obtaining the necessary U.S. and foreign regulatory approvals and that any difference between the respective regulatory risk levels is not material."
J. Christopher Hamilton, attorney and professor of television, radio and film at Syracuse University, told Newsweek: “On paper, the Netflix-Warner Bros. Discovery deal raises more traditional antitrust concerns. It would unite the world’s largest subscription-based streamer with the third largest [HBO Max], amplifying concerns about market dominance in digital distribution. But these are familiar concerns, raised in nearly every mega-merger since the early 2000s. And they often obscure the deeper structural shifts that have already reshaped the industry.
“Regulatory clearance is not as much of a barrier here as people might assume. As Warner’s board made clear in its unanimous recommendation to reject the Paramount/Skydance offer, there is no ‘material difference’ in regulatory exposure between the Paramount and Netflix bids. The real differentiators were financing structure, execution risk, and strategic coherence.”
What Happens Next
The WBD board is unable to outright block Paramount’s takeover bid and, as some suggested when reports of its intentions emerged on Tuesday, the move could prompt Paramount to sweeten its offer to shareholders.
However, this proposal and the existing Netflix agreement would require regulatory clearance, and lawmakers have raised antitrust concerns.
Update 12/18/25, 9:52 a.m. ET: This article was updated with comment from J. Christopher Hamilton.
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