Paramount ups its offer to acquire Warner Bros. where it is fighting against the Hollywood giant Netflix
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Warner Bros. Discovery said Paramount has raised the price of its takeover offer to $31 US per share, potentially setting the stage for a new bidding war with Netflix over the future of the Hollywood giant.
The company previously offered US$30 per share when it first went directly to Warner shareholders in its all-cash, hostile bid in December – just days after Warner struck a deal to sell its studio and streaming business to Netflix for US$27.75 per share.
In addition to raising its proposed purchase price, Warner said Tuesday afternoon that Paramount had raised its severance package to $7 billion. Paramount also agreed to increase a previously promised “mark-up fee” to be paid to shareholders if its deal does not go through by the end of September – up to 25 cents per share, or a total of $650 million US.
After briefly reopening talks with Paramount, Warner previously confirmed that it had received a revised offer and was reviewing it. In announcing the increased price, Warner said Paramount’s revised offer “can reasonably be expected to lead” to a higher offer as defined under its current deal with Netflix – but the company’s board has not yet decided whether Paramount’s offer is better than Netflix.
A Netflix spokesperson declined to comment when reached Tuesday afternoon.
A potential reshaping of the media landscape
The purchase of Warner Bros. Discovery will reshape Hollywood and the wider media landscape – bringing HBO Max, cult favorite titles like Harry Potter and, depending on who wins Netflix v. Paramount tug-of-war, possibly even CNN under a new roof.
Paramount wants to acquire Warner Bros. overall – including networks like CNN and Discovery. But Netflix only wants to buy Warner’s studio and streaming business. Warner’s board has repeatedly backed the deal, and on Tuesday maintained that its deal with Netflix is still standing.
If Warner’s board later deems Paramount’s offer too high, however, Netflix will have four days to match or revise its offer. It may also choose to leave.
“Are we going to lose HBO?” Cultural critics Teri Hart and Bilge Ebiri join host Elamin Abdelmahmoud on Commotion to discuss the biggest studio merger in history (Netflix and Warner Brothers) and its potential impact on consumers, as well as the theater and broadcast industry.
Paramount, Warner and Netflix have spent the past few months arguing over who has the stronger deal. But many lawmakers and entertainment trade groups have sounded the alarm, warning that buying all or part of Warner’s business would further strengthen the power of an industry already dominated by a few big players. Critics say that could lead to job losses, less diversity in filmmaking and potential headaches for consumers who already face the rising cost of streaming subscriptions.
Combined, that raises serious antitrust concerns — and Warner’s sales could come down to who gets the regulatory green light. The US Department of Justice has begun a review, and other countries are expected to do so.
Both Paramount and Netflix have argued that their proposals are good for consumers and the wider industry. And the companies have publicly targeted each other over regulatory disputes.
Paramount has identified a very large market value for Netflix. And it’s arguable that if the streaming giant acquires Warner, it will give it a major boost in the subscription video-on-demand space.
But Netflix is trying to convince regulators that it’s up against vast video libraries, particularly Google’s YouTube. Netflix also said that since it does not currently have the same studios and film distributors as Warner, it will retain and expand those operations – and the Warner-Paramount merger will include the last two major Hollywood studios, as well as theater channels and news networks.
Although CBS postponed the broadcast of the 60 Minutes episode about El Salvador’s CECOT prison, the segment appeared briefly on the free Global TV website and app. The pull of the story sparked controversy after CBS News Editor in Chief Bari Weiss seized on it to seek coverage of the Trump administration.
Politics may come into play. US President Donald Trump previously made unprecedented proposals about his involvement in the implementation of the agreement, before reversing those statements and maintaining that formal approval would be in the Department of Justice.
Trump has a close relationship with billionaire Oracle founder Larry Ellison (father of Paramount Skydance CEO David Ellison) who strongly supports Paramount’s bid to buy Warner. And the move to acquire Warner comes just months after Skydance closed its purchase of Paramount – in a controversial deal approved just weeks after the company agreed to pay the president $16 million to settle a lawsuit over Paramount’s planning. 60 Minutes Show on CBS.
Under the new ownership, CBS has seen significant editorial changes, most notably the addition of Free Press founder Bari Weiss as editor-in-chief of CBS News. Critics say similar changes could happen at Warner’s CNN if Paramount’s bid is successful.
Nevertheless, Trump continued to publicly criticize Paramount for CBS’ programming decisions. 60 Minutes. The president also met with Netflix CEO Ted Sarandos, whom he called “a great man.”
