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Paramount Drops $5 Billion Bomb to Beat Netflix in Warner Bros. Bidding War

Khac Phu Nguyen
Thu, December 4, 2025 at 12:11 PM MST 2 min read

https://finance.yahoo.com/news/paramount-drops-5-billion-bomb-191110266.html

This article first appeared on GuruFocus.

Paramount Skydance Corp. (NASDAQ:PSKY) just dialed up the pressure in the Warner Bros. Discovery Inc. (NASDAQ:WBD) auction, more than doubling its proposed breakup fee to $5 billion in a bid that could be designed to signal confidence in clearing regulatory review. The fee would be paid only if a deal is agreed to but not completed, a structure that possibly reflects Paramount's belief that its merger proposal stands a viable chance with US regulators. Warner Bros., now deep into a formal sale process launched in October after repeated unsolicited offers, is weighing second-round bids from Paramount, Netflix Inc. (NASDAQ:NFLX), and Comcast Corp. (NASDAQ:CMCSA), with a decision that could emerge in the coming weeks.

Paramount is pursuing a full acquisition of Warner Bros., while rival offers from Netflix and Comcast anticipate a spinoff of the cable networksa move Paramount argues could create a taxable event for Warner Bros., potentially weakening their appeal. Even so, people familiar with the discussions say Netflix's bid sits above Paramount's, adding tension to a process already shaped by concerns over antitrust scrutiny and industry job cuts. Since merging with Skydance Media in August, Paramount has been led by David Ellison and controlled by the Ellison family, whose ties to the current US administration could be viewed as a strategic advantage in a politically sensitive transaction. Ellison has previously described a good relationship with the Trump administration, which would ultimately oversee any Justice Department review of a deal.

Netflix, meanwhile, is navigating political pushback of its own. Republican Congressman Darrell Issa has raised antitrust concerns about a possible Netflix purchase of Warner Bros., pointing to concentration risks in streaming, while White House officials have also signaled unease with the Netflix offer, according to reporting cited by the New York Post. Netflix executives have been actively engaging both policymakers and Warner Bros.' board as they attempt to shape perceptions around their bid. The Warner Bros. board is aiming for $30 a sharevaluing the company at almost $75 billion excluding debtand, despite multiple offers from Paramount, has yet to be swayed. With the field narrowing and negotiations intensifying, the next few weeks could determine which bidder emerges with one of Hollywood's most powerful entertainment portfolios.