The Netflix–Paramount Bidding War for Warner Bros Discovery – and Why it Matters for the Future of Entertainment
Introduction
Over the past decade, the entertainment industry has seen a paradigm shift from cinema-centric consumption to one that is dominated by streaming services. However, the defining moment for Hollywood has arrived, as Netflix and Paramount rival in a multibillion-dollar bidding war for the iconic Warner Bros, which will reshape the very fabric of the industry. Warner Bros was set to be acquired by Netflix last Friday, before Paramount Skydance made a sudden hostile bid for the entire company.
On the 5th of December, Netflix announced their bid of $82.7 billion [1] for Warner Bros (the company’s studio and streaming divisions), including the popular networks HBO Max and HBO. This deal was agreed upon by both parties until Paramount Discovery, led by CEO David Ellison (son of Tech Billionaire Larry Ellison) made a last-minute offer of $108.4 billion. With multi-billionaire shareholders, politicians, and President Trump all looming over the deal [2], whether Netflix or Paramount Skydance win, it is certain to have major global implications on the way the entertainment industry is shaped. The outcome is not merely a corporate transaction but one that will determine how media is produced, distributed, and consumed.
Transaction
What makes this decision between the two companies so crucial is the two vastly different financial structures, regulatory risks, and direction for the company it poses in front of shareholders. Under the definitive agreement, Netflix shareholders would receive a consideration of cash and Netflix stock valued at $27.75 per share at a 30% premium [3]. The caveat which complicates this deal is that the structure involves the separation of Discovery, which involves Warner Bros. cable assets, including CNN, TNT Sports, and Discovery, into a separate entity that will be publicly traded, until which the deal cannot go through. On the contrary, Paramount has made a hostile tender offer in an all-cash consideration for the entirety of Warner Bros., including Discovery. The offer is of $30 per share at an 8% premium over Netflix’s offer and 40 % of a share premium [4].
Paramount intends to win over shareholders with a bid of superior value characterized by a more certain and quicker completion, an all-cash structure eliminating volatility based on Netflix’s share and uncertainty about Discovery’s trading value. Paramount CEO, David Ellison, has suggested that the offer may not be his ‘best and final’ subtly hinting at a better offer [5]. Despite this, the Warner Bros. board is strongly leaning towards Netflix due to its financial strength and long-term viability. Netflix’s market cap is 30 times larger than Paramount's and is buying WBD as an acceleration strategy rather than Paramount acquiring a company much larger than itself [6].
How this will affect the commercial world and entertainment industry.
The outcome of this bidding war will certainly have major commercial implications across the global media landscape. If Netflix is successful in acquiring Warner Bros, it would massively increase the content the streaming service can offer and produce, putting heavy pressure on competitors like Disney+ and Apple TV+. If this deal is successful, it will likely result in further M&A deals for these companies to successfully compete with Netflix’s streaming market domination.
On the other hand, if Paramount Skydance is successful in acquiring the entirety of Warner Bros Discovery, it would place Paramount on a level playing field with these industry giants. With control over production studios, news, advertising and intentional markets, it would have control over the future of WBD. Similarly to Netflix, a combined Paramount-WBD would force competitors to merge or increase in size.
What is a potential major concern is the way a Netflix-Warner Bros outcome would negatively impact smaller players such as independent studios. Democrat Senator Elizabeth Warren stated that ‘a Netflix-Warner Bros would create one massive media giant with control of close to half the streaming market – threatening to force American into higher subscription prices and fewer choices’ [7]. The market monopoly created could force independent studios to cut staff and opportunities for junior actors or even shut down entirely. Any monopoly is a concern for the free market; for an entertainment industry that is suffering due to the dominance of streaming services, it would be highly likely to reshape the way we consume media, leading to further closure of cinemas and smaller production companies.
Legal Implications
The Netflix-WBD faces a formidable regulatory pathway due to the fact that it would control approximately 1/3rd to 2/5th of global subscriptions, which exceeds the threshold for anti-competitive mergers of the Department of Justice [8]. President Trump himself raised concerns about the Netflix deal, stating that Netflix already has ‘a very big market share, and when they have Warner Brothers, you know, that share goes up a lot’[9]. The DOJ antitrust division will conduct a primary review, which may take anywhere between a few months and over a year. This deal will also face scrutiny from the EU; however, a competition law specialist, Per Alexidias, stated the deal is unlikely to be blocked outright, but significant conditions may be imposed [10]. Netflix’s primary defence will include broadening the definition of the relevant market beyond streaming services to include YouTube, TikTok, etc, to come under the threshold, which would consider it ‘significant’ [11].
Paramount argues its transaction presents a fundamentally different regulatory profile, which enhances market competition rather than dismissing it. Elison asserts that two major Hollywood studios coming together, as well as their two streaming platforms, would create a strong competitor to Netflix and Amazon Prime, and the market would benefit from enhanced competition. However, Paramount’s transaction has its fair share of regulatory risks. Firstly, the consolidation of two major film studios would overtake the current market leader, Walt Disney Co., which could raise studio consolidation concerns. Additionally, the merger would combine the ownership of CNN and CBS News, which have strong ties to Donald Trump, raising concerns about media pluralism and political bias.
Future of the Industry
The battle between Netflix and Paramount goes further than a bidding war but presents a crossroads for two completely different visions for Hollywood’s future and raises concerns based on competitive dynamics and the long-term viability of the entertainment ecosystem. If Netflix succeeds, it will bring together its data-driven algorithm with Warner Bros.' iconic IP and HBO’s diverse content to create a vertically integrated behemoth controlling production, distribution, and consumer access for much of the world. This concentration could lead to a monopolistic market structure and higher subscription costs and investments [12].
The industry views the acquisition as an existential threat owing to Netflix’s streaming-first position. Paramount proposes a vision of a stronger Hollywood, stating they would preserve the industry by investing in producing and distributing theatrical exhibitions if the bid happens to be successful [13]. However, this deal would present its own set of risks. Paramount’s projected synergies could lead to substantial job cuts due to the overlap between the two studios.
Many have expressed concern for how a Netflix-Warner Bros outcome could negatively impact smaller players such as independent studios. Democrat Senator Elizabeth Warren stated that ‘a Netflix-Warner Bros would create one massive media giant with control of close to half the streaming market – threatening to force American into higher subscription prices and fewer choices’ [14]. The market monopoly created could force independent studios to cut staff and opportunities for junior actors or even shut down entirely. Any monopoly is a concern for the free market; For an entertainment industry that is suffering due to the dominance of streaming services, it would be highly likely to reshape the way we consume media, leading to further closure of cinemas and smaller production companies.
Conclusion
The acquisition of Warner Bros Discovery is a lucrative prospect for any media company; its assets and industry standing are undeniably extremely valuable. The bidding war between Netflix and Paramount Skydance is one of the largest in entertainment history and will have major global impacts regardless of how the deal unfolds. Warner Bros. board must issue its recommendation by December 19th, after which both parties may improve their offers, other suitors may emerge and extend this saga. Beyond the transaction, the bidding war sheds light upon market efficiency and antitrust regulations based on consolidation and preservation of competition in markets. The future of streaming will be reshaped by the deal, with competition between major players intensifying and resulting in further mergers, whilst smaller players will lose standing and some may be forced to close. Ultimately, we are following a major commercial deal that will drastically change the entertainment industry, having worldwide consequences for the way we consume media.
References
[1] Netflix, Inc. (2025) Netflix to acquire Warner Bros. [Press release] 5 December. Available at: https://about.netflix.com/en/news/netflix-to-acquire-warner-bros (Accessed: 10 December 2025).
[2] Sky News (2025) ‘Why is Warner Bros for sale, what are the controversial bids – and how is Trump involved?’, Sky News, 10 December. Available at: https://news.sky.com/story/why-is-warner-bros-for-sale-what-are-the-controversial-bids-and-how-is-trump-involved-13481347 (Accessed: 10 December 2025).
[3] BNN Bloomberg, 'Netflix-Warner Bros. deal faces antitrust pushback even as company touts benefits' (5 December 2025) <https://www.bnnbloomberg.ca/business/2025/12/05/netflix-warner-bros-deal-faces-antitrust-pushback-even-as-company-touts-benefits/> (Accessed 7 December 2025).
[4] CBS News, 'Paramount Skydance makes bid for all of Warner Bros. Discovery valued at $108 billion' (8 December 2025) <https://www.cbsnews.com/news/paramount-warner-bros-discovery-108-4-billion-hostile-bid-netflix/> (Accessed 8 December 2025).
[5] CNBC, 'Paramount Skydance launches hostile bid for WBD 'to finish what we started,' CEO Ellison tells CNBC' (8 December 2025) <https://www.cnbc.com/2025/12/08/paramount-skydance-hostile-bid-wbd-netflix.html> (Accessed 8 December 2025).
[6] CNN Business, 'Netflix announces deal to buy Warner Bros. and HBO' (5 December 2025) <https://www.cnn.com/2025/12/05/media/netflix-deal-warner-bros> (Accessed 8 December 2025).
[7] Lee, B. (2025) ‘“This merger must be blocked”: Netflix‑Warner Bros deal faces fierce backlash’, The Guardian, 5 December. Available at: https://www.theguardian.com/film/2025/dec/05/netflix-warner-bros-deal-backlash (Accessed: 10 December 2025).
[8] CNN Business, 'Netflix has a big unanswered question. That may kill its Warner Bros. deal' (6 December 2025) <https://www.cnn.com/2025/12/06/media/netflix-warner-bros-antitrust> (Accessed 8 December 2025).
[9] CNN Business, 'Paramount launches a hostile takeover bid for Warner Bros. Discovery' (8 December 2025) <https://www.cnn.com/2025/12/08/business/paramount-hostile-takeoverbid-wbd> accessed 9 December 2025.
[10] Deadline, 'Netflix-Warner Bros. Discovery: EU Antitrust Experts Say $83B Deal Unlikely To Be Blocked — But Conditions May Be Imposed On Merger' (5 December 2025) https://deadline.com/2025/12/netflix-warner-bros-discovery-deal-eu-hurdles-1236637245/ (Accessed 9 December 2025).
[11] Deadline, 'Paramount Launches Hostile Takeover Offer For Warner Bros. Discovery' (8 December 2025) https://deadline.com/2025/12/paramount-launches-hostile-takeover-bid-warner-bros-discovery-1236641640/ (Accessed 9 December 2025).
[12] Variety, 'Warner Bros. Discovery Says It Will 'Carefully' Review Paramount Skydance Acquisition Offer and Issue a Recommendation in 10 Business Days' (8 December 2025) <https://variety.com/2025/tv/news/warner-bros-discovery-review-paramount-skydance-acquisition-bid-1236603529/> (Accessed 10 December 2025).
[13] Yahoo Finance, 'Lowest probability outcome: Netflix's $72 billion deal for Warner Bros. Discovery stuns Wall Street' https://finance.yahoo.com/news/lowest-probability-outcome-netflixs-72-billion-deal-for-warner-bros-discovery-stuns-wall-street-153038741.html (Accessed 10 December 2025).
[14] Lee, B. (2025) ‘“This merger must be blocked”: Netflix‑Warner Bros deal faces fierce backlash’, The Guardian, 5 December. Available at: https://www.theguardian.com/film/2025/dec/05/netflix-warner-bros-deal-backlash (Accessed: 10 December 2025).
Image Credits: Brad Weaver on Unsplash <https://unsplash.com/photos/a-sign-that-is-on-the-side-of-a-building-4Ke5VUvZXaw>
