Amid the intense and bitter bidding war for Warner Bros. Discovery — and as Paramount Skydance felt it had the inside edge due to its owners’ friendly relationship with Donald Trump — Netflix co-CEO Ted Sarandos privately met with the president to make his company’s case, according to multiple reports.
Meanwhile, on Monday morning, the scorned Paramount leadership launched a hostile takeover bid, offering a significantly higher cash price for Warner.
“The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration,” the company said in a statement. “WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity.”
Paramount, led by chairman David Ellison, pointed out that it was taking its offer public, spelling out that this was a hostile bid to force the Warner Bros. board’s hand.
“We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process,” the company asserted. “We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
According to the offer, Paramount is bidding $30 per share, all of it in cash. Netflix’s offer, meanwhile, is $27.75 per share and a mix of cash and stock. Shareholders will also get a stake in the linear TV spinoff company that will split from Warner Bros. Discovery next year.
Because it is a tender offer, Netflix will have to convince Warner Bros. Discovery stockholders to accept this deal rather than the Netflix deal approved by the WBD board. To make his case, Ellison has launched a website outlining the Paramount deal and arguing that it is better for Hollywood and the media landscape.
During the White House confab in mid-November, which reportedly lasted for two hours, Sarandos argued that Netflix wasn’t an “all-powerful monopoly” and had even suffered subscription losses in recent years, adding that merging with WBD would make the company about the size of YouTube.
Bloomberg also reported the president told Sarandos that Warner Bros. should go to the highest bidder, leaving the impression that Netflix wouldn’t face immediate pushback from the White House. The acquisition will combine the streaming pioneer with Warner’s film and television studios, including HBO and HBO Max, and give it access to WBD’s popular franchises, such as the Harry Potter franchise and Game of Thrones.
Paramount chief David Ellison, meanwhile, had suggested throughout the sale process that he had the easiest regulatory path to seal the deal because of his and his father Larry Ellison’s ties to the president. The elder Ellison, who backed his son’s purchase of Paramount and would be heavily involved in the Warner merger, is the founder of Oracle and a close Trump ally.
Sarandos seemingly came out of the meeting feeling that he’d “received some sort of blessing by Trump,” according to The Hollywood Reporter. At the same time, based on Paramount's presumption that it could likely underbid for Warner due to the Ellisons’ “Trump card,” Sarandos saw the opening for Netflix’s winning offer.
In the end, Netflix shocked the media and entertainment landscape when it agreed to buy Warner Bros. for $82.7 billion, most of it in cash. The agreement, which won’t close until after Discovery Global separates from WBD in late 2026, will see Netflix paying $27.75 per share to Warner stockholders.
The deal also includes a massive $5.8 billion breakup fee if government regulators do not approve the deal, above the $5 billion that Ellison had offered in Paramount’s latest proposal. Meanwhile, there are still a number of hurdles for Netflix to clear before the streaming giant can merge with one of Hollywood’s oldest and largest studios.
The deal, for instance, is contingent on WBD spinning off its declining cable television properties, which had been in the works before Warner CEO David Zaslaz put a “for sale” sign on the company.
The standalone company Discovery Global, which will not be under the Netflix umbrella, will include cable news network CNN, TNT Sports, TBS and Discovery, along with streaming and digital properties Bleacher Report and Discovery+. The spinoff is scheduled for the third quarter of 2026.
Additionally, the merger is facing vocal opposition from Hollywood's powerful labor unions, including the Writers Guild of America West and Writers Guild of America East.
“The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the WGA said in a statement. “This merger must be blocked.”
On top of that, Paramount has now implemented “Plan B” and is going directly to Warner Bros. shareholders in an effort to launch a hostile takeover.
“We believe our offer will create a stronger Hollywood,” Ellison wrote on Monday. “It is in the best interests of the creative community, consumers and the movie theater industry. We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction. We look forward to working to expeditiously deliver this opportunity so that all stakeholders can begin to capitalize on the benefits of the combined company.”
Paramount’s executives have already been in DC lobbying against Netflix, and Ellison hinted at the strategy in a blistering letter to the Warner Bros. board last week, which was sent just before the Netflix deal was announced.
“It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder,” the letter to the board stated, adding that the bidding process had become “tilted and unfair.”
Finally, though Sarandos may have left his meeting with Trump with renewed confidence, the unpredictable Trump could still step in and try to kill the deal. Speaking to reporters ahead of Sunday’s Kennedy Center Honors, the president signaled that he could still intervene in the sale of Warner Bros. to Netflix.
Though he praised Netflix as a “great company” and Sarandos as a “fantastic man,” all while confirming that he’d recently met with the Netflix chief, the president said that the combined size of the two companies “could be a problem” and he might have to step in.
“I have a lot of respect for him, but it’s a lot of market share, so we’ll have to see what happens,” Trump said, adding: “They have a very big market share and when they have Warner Bros, you know, that share goes up a lot, so, I don’t know. I’ll be involved in that decision, too. But they have a very big market share.”
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