The acquisition of Warner Bros Discovery has turned into a proxy war between Netflix and the billionaire Ellison family. Netflix is reportedly switching to an all-cash offer for its $83 billion purchase of WBD’s studios and streaming business, a move designed to counter a hostile $108.4 billion bid from Paramount Skydance, controlled by the Ellisons.
Larry Ellison, the co-founder of Oracle, has put up a $40 billion personal guarantee to back Paramount’s play for WBD. Despite this massive financial backing, WBD’s board has rejected the offer, arguing it relies too heavily on debt. In response, Paramount is attempting to overhaul WBD’s board of directors to force a vote against the Netflix deal and pave the way for their own acquisition.
Netflix’s strategy is to speed up the process by removing the complexity of stock swaps. The new plan offers WBD shareholders cash for the company’s crown jewels, including HBO and the Warner Bros movie studios. WBD’s linear TV assets, such as CNN and the Cartoon Network, are excluded from the purchase and will be retained by current shareholders.
The battle for control comes amid growing scrutiny from Washington. Politicians have expressed concern that a Netflix-WBD merger would control almost half the streaming market. This political headwind adds another layer of complexity to the fight between the corporate giant Netflix and the dynastic wealth of the Ellisons.
Despite the drama, the market signaled approval of Netflix’s tactic. WBD shares closed higher on Tuesday, suggesting that investors prefer the certainty of Netflix’s cash over the higher valuation but riskier structure of the Paramount bid. The saga highlights the intense competition for premium content in the modern media era.