Warner Bros. Discovery’s board rejected Paramount’s latest bid to acquire the whole company. However, Paramount Skydance has no plans to back out. They have now escalated the dispute to Washington. In a letter to a House Judiciary antitrust subcommittee, the studio’s chief legal officer, Makan Delrahim, called the Netflix-WBD deal “presumptively unlawful” (via Deadline).
Paramount’s argument is that the transaction would harm competition, with Delrahim claiming it would “further cement [Netflix’s] dominance in streaming video on demand.” Delrahim, a former head of the Justice Department’s antitrust division during Trump’s first term, filed the letter on the same day the committee held a congressional hearing examining the streaming marketplace.
The potential WBD sale dominated the discussion. While Paramount executives did not testify in person, lawmakers accepted written submissions. A central debate was how regulators define the market.
Delrahim claimed that Netflix asserted that “free, user-generated videos on YouTube and TikTok should be considered an adequate substitute for premium-produced content available on Netflix or HBO Max.” He called it “psychedelic antitrust,” adding that the broader framing was “tortured and absurd.”
He shared how Netflix had previously dismissed YouTube as a rival. He brought up security filings where the streamer “compared itself to actual competitors in streaming video on demand.” Netflix declined to comment on Paramount’s alleged strategic move.
Paramount Declines to Raise Its Bid for WBD
The Paramount logo | Credits: Paramount Pictures
Paramount Skydance reiterated its current all-cash bid of $30 per share for Warner Bros. Discovery. The studio declined to raise its bid even after WBD previously rejected the proposal. David Ellison’s studio continued to argue that its proposal is superior to the Netflix deal and is fully financed.
Paramount further claimed that it has addressed all concerns raised by WBD and remains confident in its ability to close the transaction. In a detailed statement, the studio shared (via Deadline):
Throughout this process, Paramount has diligently and constructively addressed each concern raised by WBD. As detailed in Paramount’s December 22 amended proposal and subsequent filings, Paramount cured every issue raised by WBD on December 17, most notably by providing an irrevocable personal guarantee by Larry Ellison for the equity portion of the financing.
They went on to claim that WBD raised concerns about issues that they had already addressed. A day earlier, the WBD board urged shareholders to reject Paramount’s amended offer. WB called the Paramount offer “inferior” to its agreement with Netflix.
Under the current merger deal, Netflix would acquire Warner Bros. Studios and streaming assets for roughly $27.75 a share in cash and stock. As per this deal, WB will have to spin off its linear television networks into a new public company, Discovery Global.
According to Deadline, WBD brought up the downside risk if a Paramount deal collapsed. The studio would incur $4.7 billion in expenses, including a $2.8 billion termination fee due to Netflix. They argued that with Paramount’s $5.8 billion termination fee, the proposed deal “would not come close to helping WBD address the likely damage to our businesses.”
Paramount claimed that they had a better chance at regulatory approval. They also cited recent market volatility, including Netflix’s share dip. Paramount also defended its lenders, Bank of America, Citibank, and Apollo, calling them “global sophisticated financial institutions.” They also continue mentioning Larry Ellison’s personal guarantee if the deal goes through.
Both the Paramount and Netflix transactions would require regulatory approval and could take up to 18 months to complete the deal.
WBD Might Still Be Open to a Paramount Deal
Warner Bros. (left) and Paramount (right)
WBD may have rejected Paramount’s latest bid, but the studio has not fully closed the door on Paramount. During his appearance on CNBC’s Squawk Box with David Faber, WB board chair Samuel Di Piazza Jr. addressed the board’s recent rejection of the Paramount deal (via THR).
Di Piazza Jr.’s comments did not violate their signed agreement with Netflix, but he had a few indirect notes to David Ellison. Di Piazza Jr. shared that Paramount “stepped up to the table” by adding Larry Ellison’s personal financing guarantee. He called it “a major change in their position.”
However, he stressed that Ellison “didn’t raise the price” ultimately. It suggested that the WBD board still saw price as the primary remaining obstacle in this proposed deal. Another issue for Di Piazza Jr. was the $2.8 billion Netflix breakup fee. He shared:
In the large majority of cases, when an overbidder comes in, they take that break fee and pay it. From our perspective, they’ve got to put something on the table that is compelling and is superior.
Di Piazza Jr. also asserted that he currently views Netflix as safer. He hinted these CNBC appearances may continue, sharing, “I think it’s going to become a habit.” Finally, he also addressed claims of the WB board’s bias against Paramount. He shared:
That’s nothing further from the truth. We have talked to them now since September. We’ve given them lots of input on what they needed to do to change. At the last minute, they went to $30 [per share]. And then it was after the last minute that they guaranteed it. We would be very open to do a transaction with Paramount.
Paramount’s offer has a deadline of January 21, 2026, which will likely be extended, given the studio’s continued efforts. Eventually, WB shareholders will decide on the deal through voting.
What do you think of Paramount’s efforts to thwart the WB-Netflix deal? Let us know in the comments below!
This post belongs to FandomWire and first appeared on FandomWire
