How did Paramount beat Netflix to Warner Bros?

David Ellison has taken his chequebook and gone straight to the shareholders. After Warner Bros Discovery snubbed Paramount's advances in favour of selling its crown jewels to Netflix for $82.7bn, the Skydance boss launched a hostile takeover bid worth $108.4bn—both figures include debt—that bypasses the boardroom entirely. The manoeuvre transforms what was already Hollywood's most consequential dealmaking saga into a full-throated battle for a century-old studio empire, complete with duelling offers, presidential X posts, and the kind of regulatory headaches that make competition lawyers reach for the premium coffee.

The stakes extend well beyond Southern California. Whichever deal prevails will reshape how British audiences access everything from HBO's prestige dramas to DC superhero franchises, whilst concentrating control over news networks including CNN in ways that regulators on both sides of the Atlantic are certain to examine closely. What makes this fight particularly thorny is the sheer unpredictability baked into the process.

Two paths, one target

Netflix's proposal focuses on Warner Bros' studio and streaming operations—the assets that actually generate value in 2025. That includes Warner Bros Pictures, New Line Cinema, and HBO Max with its 120 million subscribers. The streaming giant is offering $27.75 per share in cash, up from an initial bid that mixed cash with equity in the spun-off remainder of the company.

The other parts of Warner Bros Discovery—traditional pay-TV networks like CNN, TNT, and the Food Network—would be carved out as a separate entity. These linear channels represent a declining business model, but they still generate cash flow and carry significant brand weight in news and sports.

Paramount's counter-offer takes the lot. Ellison is proposing $30 per share in all-cash terms for the entire Warner Bros Discovery, legacy cable channels included. The pitch to shareholders emphasises certainty: cash in hand rather than equity in an unknown spin-off entity, plus Paramount has offered to cover the $2.8bn break-up fee that Warner Bros would owe Netflix if that deal collapses.

That "certainty" claim deserves scepticism. Both deals face regulatory reviews that could stretch well into 2026, and either could be blocked outright.

The consolidation paradox

Ellison's aggressive play comes barely months after he acquired Paramount itself, folding the studio into his Skydance operation over the summer of 2024. The speed of his pursuit reveals the strategic logic driving Hollywood consolidation: scale has become the only viable defence against streaming's brutal economics.

Paramount currently serves 79 million streaming subscribers. Add HBO Max's 120 million, and suddenly you're competing in the same weight class as Disney and Netflix. The traditional TV networks—Paramount's CBS, Nickelodeon, and Comedy Central alongside Warner Bros' CNN and sports holdings—would gain negotiating leverage with distributors and advertisers whilst offering opportunities to slash duplicate costs.

Warner Bros Discovery itself emerged from a major merger in 2022, when Discovery acquired WarnerMedia from AT&T. That deal loaded the combined entity with debt it has struggled to service, despite owning intellectual property spanning Harry Potter to The Sopranos. The company's vulnerability stems from that debt burden colliding with the expensive realities of streaming competition.

What's interesting here is that the very consolidation meant to solve streaming's profitability problem is exactly what makes regulators nervous.

A regulatory minefield

Netflix already dominates global streaming with over 300 million subscribers. Handing it Warner Bros' film studio and HBO's premium content would cement that dominance in ways that concern actors' unions, screenwriters, and cinema operators who fear even less competition for talent and theatrical distribution.

Yet Paramount's alternative raises its own red flags. A combined entity would control substantial slices of sports broadcasting, children's entertainment through Nickelodeon and Cartoon Network, and news via CBS and CNN. According to Raymond James analysts, more than 70% of HBO Max subscribers in the US already pay for Netflix—a customer overlap that signals potential market concentration problems regardless of which bid succeeds.

European regulators will scrutinise these deals through a different lens, focusing on how concentration affects local content production and distribution. Both the Competition and Markets Authority and the European Commission have shown willingness to impose behavioural remedies or block media mergers outright when market power concerns arise.

The approval calculus hinges partly on how regulators define the relevant market. If YouTube, TikTok, and other digital platforms count as direct competitors to traditional streaming and TV, the case for approval strengthens. If regulators draw the boundaries more narrowly around premium scripted content and live sports, either deal looks far more problematic.

The Trump wild card

Then there's the president. Trump has publicly called for CNN to be sold to new owners as part of any deal—a condition Paramount's takeover would satisfy by putting the news network under Ellison family control. Larry Ellison, David's father and Oracle founder, ranks as a prominent Republican mega-donor with close ties to Trump.

That relationship initially looked like Paramount's ace. Jared Kushner's investment firm Affinity Partners, backed by Saudi and Qatari sovereign wealth funds, was part of the financing consortium until the Trump family connection drew enough scrutiny that Kushner withdrew. The Ellisons themselves remain central to the bid, creating an obvious conflict between Trump's criticism of CNN's coverage and his allies' attempt to acquire it.

Trump's stance has been characteristically incoherent. He praised the Ellisons, then attacked Paramount on social media after it aired a 60 Minutes interview with Marjorie Taylor Greene criticising him. He noted competition concerns about Netflix whilst complimenting its executives. In February, he claimed he would leave the decision to the Department of Justice rather than intervene personally—a statement that carries limited credibility given his history of pressuring regulators and his ongoing vendetta against CNN.

The practical impact of Trump's position matters less than the uncertainty it creates. Companies and their advisers cannot model for presidential whim, which makes deal timing and structure harder to plan and increases the risk premium on either transaction.

What comes next

Both bids set target completion dates many months away, which reflects realistic expectations about regulatory timelines. Antitrust reviews in the US and Europe typically require 12 to 18 months for transactions of this complexity, and either jurisdiction can effectively veto a deal.

Warner Bros Discovery's board must now decide whether Netflix's focused bid for the valuable assets outweighs Paramount's higher per-share price for the entire company. Shareholders will make their own calculations about which offer is more likely to clear regulatory hurdles and actually close.

For British viewers, the implications extend beyond which app carries which shows. Further consolidation in Hollywood reduces the number of buyers for UK-produced content and limits distribution options for British streaming platforms trying to compete. If Netflix absorbs Warner Bros' studio, the number of major film buyers drops by one. If Paramount takes control, the combined entity would rival Disney in scale, creating a different but equally concentrated market structure.

The regulatory decisions made in Washington and Brussels over the coming year will determine not just who owns Batman and HBO, but whether streaming's endgame leaves room for competition at all.