Washington, United States – The battle for Warner Bros. Discovery intensified Monday as Paramount Global, backed by Oracle CEO Larry Ellison, increased its bid and offered a significant personal guarantee to secure the deal. Ellison pledged $40.4 billion of his own funds to support Paramount’s $108 billion offer, directly responding to concerns raised by Warner Bros. Discovery’s board regarding the financial stability of the previous proposal. This move escalates the ongoing competition with Netflix for control of the media and entertainment giant.
The revised offer comes after Warner Bros. Discovery last week deemed Paramount’s initial bid too risky, citing concerns about the source of funding and potential regulatory hurdles. Netflix initially surprised the industry on December 5th with an agreement to acquire Warner Bros. Discovery for approximately $83 billion, a deal that would represent a major consolidation in the entertainment sector.
The Paramount and Netflix Bidding War for Warner Bros. Discovery
The core of the dispute centers on the future of Warner Bros. Discovery, a company formed in 2022 through the merger of WarnerMedia and Discovery, Inc. Both Paramount and Netflix see strategic value in acquiring the company, which includes assets like HBO Max and the extensive Warner Bros. film library. However, the approaches and financial backing of the two bidders differ substantially.
Paramount’s offer, led by CEO David Ellison (Larry Ellison’s son), is an all-cash deal of $30 per share. This contrasts with the structure of Netflix’s bid, which includes a combination of cash and stock. A key difference highlighted by Paramount is its commitment to acquiring Warner Bros. Discovery’s cable channels, including CNN, TNT, and TBS, alongside its streaming services.
Addressing Warner Bros. Concerns
Warner Bros. Discovery’s board had expressed reservations about Paramount’s reliance on funding from Middle Eastern sovereign wealth funds, potentially leading to delays in regulatory approval. The $40.4 billion personal guarantee from Larry Ellison is intended to alleviate these concerns by demonstrating a firm financial commitment. Paramount also increased the breakup fee to $5.8 billion, matching Netflix’s offer, to further incentivize the deal.
According to David Ellison, the revised proposal “continues to be the superior option to maximize value for WBD shareholders.” He emphasized the fully financed, all-cash nature of the bid as a key advantage.
Political Dimensions of the Deal
The high-stakes acquisition has attracted attention from the White House. Former President Donald Trump has publicly commented on the potential impact of the deals, expressing concerns that a combined Netflix and Warner Bros. Discovery could wield excessive market power. He has also criticized CNN’s coverage and suggested that new ownership would be desirable.
Trump’s involvement underscores the political sensitivity surrounding media consolidation. Both Paramount and Netflix have engaged in lobbying efforts with the White House, seeking to influence the outcome. Paramount, under David Ellison’s leadership, has also made editorial changes at CBS News, appointing Bari Weiss, a known critic of mainstream media bias, as editor-in-chief. This move has been interpreted by some as an attempt to appeal to conservative viewpoints.
The appointment of Weiss, as reported by The Guardian, signals a potential shift in the network’s editorial direction. This change is occurring as Paramount seeks to position itself favorably during the acquisition process.
The ongoing competition between Paramount and Netflix represents a pivotal moment for the entertainment industry, with implications for streaming services, traditional media, and the broader media landscape. The deal also highlights the growing influence of tech billionaires in Hollywood, as evidenced by Larry Ellison’s substantial financial commitment. The future of media consolidation and the role of streaming platforms remain key secondary keywords in this evolving situation.
The next step involves further review by Warner Bros. Discovery’s board and potential scrutiny from regulatory bodies. A final decision is expected in the coming weeks, though the timeline remains uncertain. Investors will be closely watching for any developments that could impact the outcome of this high-profile bidding war and the future direction of Warner Bros. Discovery.
