Streaming power struggle erupts as Paramount moves against Netflix over Warner Bros

Paramount has launched a hostile takeover bid for Warner Bros. Discovery, taking its offer directly to shareholders in a dramatic attempt to derail Netflix’s agreed deal for the Hollywood giant.

The all-cash bid values Warner Bros. Discovery at $108.4 billion, with Paramount offering $30 per share for the entire company, including the studio, HBO, HBO Max and networks such as CNN, TBS and TNT.

Netflix, which secured a binding agreement last week, has offered $27.75 per share in a mix of cash and stock for Warner Bros., HBO and HBO Max, excluding most cable assets.

Paramount chief executive David Ellison says his offer delivers greater certainty and faster completion.

“We are offering shareholders $17.6 billion more cash than the deal currently signed with Netflix,” Ellison told CNBC.

Under the terms of the takeover, Warner Bros. Discovery has 10 business days to recommend whether shareholders should accept or reject Paramount’s bid. The tender offer runs until 8 January 2026, unless extended.

Who is backing the bid

The takeover is backed by Oracle co-founder Larry Ellison, David Ellison’s father, along with RedBird Capital Partners, sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, and Affinity Partners, the investment firm formed by Jared Kushner. Middle Eastern funds account for $24 billion of the financing, while Paramount has also secured $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management.

Paramount has said foreign investors will hold no voting rights or board seats, allowing the deal to avoid national security scrutiny. Chinese tech group Tencent is no longer part of the financing. If the takeover is approved but later blocked by regulators, Paramount has pledged to pay a $5 billion break-up fee.

Why Netflix’s deal is being challenged

Netflix’s agreement values its proposal at $82.7 billion, excluding most TV networks. Netflix argues that spinning off the cable business could unlock further shareholder value.

Paramount disputes that, saying the future value of the TV assets is being overstated and that shareholders are being exposed to unnecessary stock-market risk.

Ellison has also raised antitrust concerns, arguing that a tie-up between the world’s biggest streamer and HBO Max would concentrate too much power in one company.

Netflix maintains the deal will pass regulatory review and points to broader viewing data that shows competition from YouTube and Disney.

If Warner Bros. Discovery abandons Netflix for Paramount, it would owe Netflix a $2.8 billion break-up fee.

What this means for Hollywood

Paramount has framed its bid as a defence of traditional cinema. Ellison has pledged that if his takeover succeeds, the company would release at least 30 films a year exclusively in cinemas.

He warned that a Netflix-controlled Warner Bros. could accelerate the decline of the theatrical business and reshape release windows in favour of streaming.

Netflix has said it would honour existing cinema commitments but expects film release windows to become more streaming-focused over time.

What happens next

Warner Bros. Discovery previously rejected three Paramount bids before selecting Netflix’s offer last week. Paramount returned with the current $30-a-share all-cash bid, accusing the board of backing an inferior deal.

Warner Bros. Discovery has said it will review the offer and issue its recommendation within the legal timeframe.

Shares in Warner Bros. Discovery rose on expectations of a bidding war, while Netflix stock slipped amid investor uncertainty.

For now, the future of one of Hollywood’s most powerful studios remains in play.