Why Netflix Wants to Sell CNN and Keep Harry Potter, Trump Threatens to Block Netflix
- Paramount Skydance launched a hostile $30-per-share all-cash takeover bid for Warner Bros. Discovery to challenge the existing $27.75 cash-and-stock agreement with Netflix
- President Donald Trump has expressed skepticism about the Netflix deal due to antitrust concerns while simultaneously attacking Paramount over critical news coverage on CBS.
- Warner Bros. shareholders now face a choice between Paramount's immediate cash premium or Netflix's strategic plan to spin off cable assets and focus on streaming growth.
The battle for the future of Hollywood has erupted into a high stakes corporate war. Paramount Skydance has officially launched a hostile takeover bid for Warner Bros. Discovery just days after the studio agreed to a merger with Netflix. This aggressive move by Paramount CEO David Ellison seeks to bypass the Warner board and appeal directly to shareholders with a superior all cash offer of $30 per share. The bid values the company at $108.4 billion and challenges the Netflix deal which is valued at roughly $82.7 billion.
The core of the dispute lies in the divergent visions for the company’s future. Netflix proposes acquiring only the premium studio and streaming assets while spinning off the declining cable networks like CNN and TNT into a separate entity. Paramount conversely wants to swallow the entire conglomerate whole. They argue that their all cash proposal offers certainty in a volatile market whereas the Netflix deal relies on a mix of cash and stock that fluctuates with the market.
President Donald Trump has injected a volatile political dimension into this business rivalry. The president has blown hot and cold on both suitors. He recently praised Netflix co CEO Ted Sarandos but warned that the streaming giant’s market share "could be a problem." Simultaneously he lashed out at Paramount on social media after its subsidiary CBS News aired critical coverage of him. This unpredictability has turned the regulatory approval process into a game of political roulette where the whims of the White House could determine the winner.
The antitrust implications for both deals are significant. A Netflix merger would create a streaming behemoth with unparalleled dominance over content distribution. Senator Elizabeth Warren has already slammed the proposal as an "anti monopoly nightmare." However Paramount’s bid also raises eyebrows as it would consolidate two major news networks—CBS and CNN—under one roof. Regulators will have to decide whether they define the market broadly to include tech giants like YouTube or narrowly to focus on traditional media.
Paramount is betting that its connections to the Trump orbit will give it an edge. Larry Ellison who is David Ellison's father and a major Republican donor has close ties to the administration. Jared Kushner is also listed as a financial partner in the bid. Despite these connections the president’s recent outburst against CBS suggests that loyalty is conditional. The message to Ellison seems clear: curb the criticism or risk losing the deal.
Warner Bros. Discovery’s board remains steadfast in its support for the Netflix agreement. They argue that the split structure offers better long term value for shareholders who will retain equity in the new independent cable company. However Paramount’s tender offer puts immediate pressure on them. If enough shareholders tender their stock at the higher price the board may be forced to reconsider or risk a shareholder revolt.
The financial mechanics of the hostile bid are backed by a formidable coalition. Paramount has secured $41 billion in equity financing and $54 billion in debt commitments from major banks like Bank of America and Citi. This war chest demonstrates that Ellison is serious about winning this prize. He has even hinted that the $30 offer is not his "best and final" price which leaves the door open for a bidding war that could drive the valuation even higher.
Netflix for its part remains confident. Ted Sarandos dismissed the Paramount threat during a recent investor conference and emphasized the "pro consumer" nature of their deal. He also took a jab at Paramount’s promise of $6 billion in cost synergies which he framed as a euphemism for massive job cuts. Netflix argues that their acquisition is about growth and investment in content rather than consolidation and shrinking.
The clock is ticking on this corporate drama. Paramount’s tender offer is open for twenty business days. Warner Bros. has ten days to respond formally. This timeline creates a pressure cooker environment where lawyers and bankers will be working around the clock to sway institutional investors. The outcome will likely hinge on whether shareholders prefer the immediate safety of cash or the potential upside of Netflix stock.
Ultimately this saga reveals the new reality of American capitalism. It is no longer enough to have the best balance sheet or the smartest strategy. CEOs must now navigate a landscape where political favor is a tangible asset and regulatory enforcement is a weapon. The shareholders of Warner Bros. are now pawns in a much larger game involving ego and power and the future of global entertainment.
As the battle lines harden the industry holds its breath. Will the regulators block both deals? Will Trump tip the scales? Or will the sheer force of capital determine the victor? One thing is certain: the era of the Hollywood mega merger is far from over.