Financial Markets

If Warner’s board changes course and deems Paramount’s latest offer superior, Netflix will be able to revise its bid.

Warner Bros Discovery (WBD) says it is reviewing a new takeover offer from Paramount Skydance, but it continues to recommend a competing proposal from Netflix to its shareholders in the meantime.

Warner disclosed on Tuesday that it had received a revised offer from Paramount after a seven-day window to renew talks with the Skydance-owned company elapsed on Monday. Paramount – which is run by David Ellison, son of United States President Donald Trump ally and Oracle cofounder Larry Ellison – confirmed it had submitted the proposal, but neither company provided details about it. The company was widely expected to have raised its offer.

A WBD buyout would reshape Hollywood and the wider media landscape, bringing HBO Max, cult-favourite titles like Harry Potter and, depending on who wins the Netflix vs Paramount tug-of-war, potentially even CNN under a new roof.

Paramount wants to acquire Warner Bros in its entirety, including networks like CNN and Discovery, and went straight to shareholders with an all-cash, $77.9bn hostile offer just days after the Netflix deal was announced in December. Accounting for debt, that bid offered Warner stakeholders $30 per share, amounting to an enterprise value of about $108bn.

Paramount maintained on Tuesday that its tender offer remains on the table while Warner evaluates its latest proposal.

Netflix wants to buy only Warner’s studio and streaming business for $72bn in cash, or about $83bn including debt. Warner’s board has repeatedly backed this deal and on Tuesday maintained that its agreement with Netflix still stands.

Warner shareholders are to vote on the Netflix proposal on March 20.

If Warner’s board changes course and considers Paramount’s latest offer superior, Netflix would have a chance to match or revise its proposal, potentially setting the stage for a new bidding war. It could also choose to walk away.

Further consolidation

Paramount, Warner and Netflix have spent the last couple of months in a heated back and forth over who has the stronger deal. But along the way, lawmakers and entertainment trade groups have sounded the alarm, warning that either buyout of all or parts of Warner’s business would only further consolidate power in an industry already run by just a few major players. Critics said that could result in job losses, less diversity in filmmaking and potentially more headaches for consumers who are facing rising costs of streaming subscriptions as is.

Combined, that raises tremendous antitrust concerns – and a Warner sale could come down to who gets the regulatory greenlight. The US Department of Justice has already initiated reviews, and other countries are expected to do so too.

Both Paramount and Netflix have argued that their proposals are good for consumers and the wider industry. And the companies have taken aim at each other publicly with regulatory arguments.

Paramount has pointed to Netflix’s much larger market value, and it has argued that if the streaming giant acquires Warner, it would only give it more dominance in the subscription video-on-demand space. But Netflix is trying to persuade regulators that it’s up against broader video libraries, particularly Google’s YouTube, America’s most-watched TV distributor.

Paramount’s bid will create a studio bigger than market leader Disney and fuse two major TV operators, which some Democratic senators said would control “almost everything Americans watch on TV”.

It will also hand control of CNN to the conservative-leaning Ellisons, soon after they acquired CBS News and installed as its editor-in-chief Bari Weiss, a right-leaning opinion editor who had no prior TV experience. The network settled for $16m a lawsuit that Trump had filed, accusing CBS’s 60 Minutes programme of editing an interview with Kamala Harris to his 2024 presidential election rival’s advantage. It also appointed Kenneth Weinstein, a former Trump administration official, as ombudsman to investigate allegations of bias.

In December, Ellison visited the White House, media reports said, and told Trump that Paramount would execute “sweeping changes” if it acquired CNN’s parent company.

More recently, Trump, in a Truth Social post on Saturday, demanded that Netflix fire former US National Security Adviser Susan Rice from its board. Rice, a Black woman, had served under former Presidents Barack Obama and Joe Biden, both Democrats.

“This is a business deal. It’s not a political deal,” Netflix CEO Ted Sarandos told BBC Radio 4’s flagship Today programme on Monday. “This deal is run by the Department of Justice in the US and regulators throughout Europe and around the world.”

Trump previously made unprecedented suggestions about his involvement in seeing a deal through before walking back those statements and maintaining that regulatory approval will be up to the Justice Department.

Tehran, Iran – Iran says it will continue efforts to get out of a blacklist of a prominent global watchdog on money laundering and “terrorism” financing despite “20 years of obstruction” from domestic opponents.

The statement by the Financial Intelligence Unit of Iran’s Ministry of Economic Affairs on Sunday came two days after the Paris-based Financial Action Task Force (FATF) renewed its years-long blacklisting of Iran, according to a report by the official IRNA news agency.

The FATF also ramped up measures aimed at isolating Iran from global financial markets with a particular focus on virtual asset service providers (VASPs) and cryptocurrencies.

It recommended member states and financial institutions around the world to:

• Refuse to establish representative offices of Iranian financial institutions and VASPs or consider the noncompliance risks involved.
• Prohibit financial institutions and VASPs from establishing offices in Iran.
• On a risk basis, limit business relationships or financial transactions, including virtual asset transactions, with Iran or people inside the country.
• Prohibit financial institutions and VASPs from establishing new correspondent banking relationships and require them to undertake a risk-based review of existing ties.

Even the flow of funds involving humanitarian assistance, food and health supplies as well as diplomatic operating costs and personal remittances are recommended to be handled “on a risk basis considering the “terrorist” financing or proliferation financing risks emanating from Iran”.

What does the FATF move mean?

Iran has been blacklisted by the FATF for years and is currently on the list in the company of just two other countries: North Korea and Myanmar.

Since October 2019, Iran has had “heightened measures” like supervisory examination and external audit requirements recommended against it and has been subject to “effective countermeasures” since February 2020.

This contributed to making access to international transactions increasingly difficult or impossible for Iranian banks and nationals and made the country more dependent on costlier shadowy third-party intermediaries for transactions.

The new countermeasures emphasise existing frameworks but also specifically cite virtual assets, signalling an increased focus.

The fact that the FATF also urges countries and global institutions to remain wary of risks of having any dealings with Iran may mean even more limited transaction opportunities for Iranian entities and nationals.

Small banks maintaining old correspondent relations with Iranian counterparts may also reconsider after being recommended to re-evaluate existing links.

The isolation has hobbled state-run or private income streams and contributed to the continuous depreciation of the Iranian rial over the years.

Links with Iran’s nuclear dilemmas

The FATF, formerly known by its French name, was established by the Group of Seven (G7) countries in 1989 to combat money laundering but later had its mandate expanded to countering financing of “terrorism” and weapons of mass destruction.

It has been formally raising concerns about Iran since the late 2000s, which is also when it started calling for countermeasures as international tensions grew over Iran’s nuclear programme and the country was sanctioned by the United Nations Security Council.

But a year after Iran signed a landmark 2015 nuclear deal with world powers that lifted the sanctions, the FATF also acknowledged a “high-level political commitment” from Iran and agreed to an action plan for the country to address its compliance requirements.

The centrist government of President Hassan Rouhani, who had clinched the deals, pressed ahead with ratifying several laws needed to fulfil the action plan despite opposition from hardliners who were firmly against the increased financial transparency and international supervision.

But United States President Donald Trump unilaterally reneged on the nuclear deal in 2018, imposing a “maximum pressure” campaign that has remained in effect until today. The move empowered the argument from the hardliners in Tehran, who succeeded in blocking the ratification of the rest of the FATF-linked legislation, leaving the issue dormant for years.

Washington has retained the sanctions over the years with some of the latest – including the blacklisting in January of two United Kingdom-based cryptocurrency exchanges – allegedly connected to Iran’s Islamic Revolutionary Guard Corps.

The UN Security Council sanctions were also reinstated against Iran in September when Western powers triggered the “snapback” mechanism of the nuclear accord. They include an arms embargo, asset freezes and travel bans as well as nuclear, missile and banking sanctions that are binding for all UN member states.

Support for ‘axis of resistance’

The Iranian hardliners railing against any progress on FATF-related legislation have presented two main concerns.

They assert that fully adhering to the watchdog’s guidelines would curb Tehran’s ability to back its “axis of resistance” of aligned armed groups in Lebanon, Iraq, Yemen and Palestine. The axis lost its base in Syria with the fall of President Bashar al-Assad in December 2024.

Hardliners have also suggested that Iran’s ability to circumvent US sanctions may be significantly compromised by disclosing all the information required by the FATF.

Iran has been selling most of its oil to China at hefty discounts, using a shadow fleet of ships that turn their transponders off to avoid detection in international waters. The country has also for years been forced to rely on a capillary network of currency exchanges and intermediaries, some of them based in neighbouring countries, such as Türkiye and the United Arab Emirates.

To assuage some of the domestic concerns, two FATF-related laws ratified by Iran in 2025 were passed with special “conditions” and reservations infused in the text.

One of the main conditions was that the ratified regulations must not “prejudice the legitimate right of peoples or groups under colonial domination and/or foreign occupation to fight against aggression and occupation and to exercise their right to self-determination” and “shall not be construed in any manner as recognition of the Zionist occupying regime”, a reference to Israel.

Iran also said it would not accept any referral to the International Court of Justice and asserted that its own Supreme National Security Council would determine which groups qualify as “terrorist” outfits.

Those conditions were rejected by the FATF, leading to the increased countermeasures.

The watchdog also said it expects Iran to identify and freeze “terrorist assets” in line with relevant UN Security Council resolutions. Some of Iran’s nuclear and military authorities are among individuals sanctioned by those resolutions.

The nonpartisan Congressional Budget Office’s 10-year outlook projects worsening long-term United States federal deficits and rising debt, driven largely by increased spending, notably on Social Security, Medicare, and debt service payments.

Compared with the CBO’s analysis this time last year, the fiscal outlook, which was released on Wednesday, has deteriorated modestly.

The CBO said that the deficit for fiscal 2026 – President Donald Trump’s first full fiscal year in office – will be about 5.8 percent of GDP, about where it was in fiscal 2025, when the deficit was $1.775 trillion.

But the US deficit-to-GDP ratio will average 6.1 percent over the next decade, reaching 6.7 percent in fiscal 2036 – far above US Treasury Secretary Scott Bessent’s goal to shrink it to about 3 percent of economic output.

Major developments over the last year are factored into the latest report, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from the US mainland.

As a result of these changes, the projected 2026 deficit is about $100bn higher, and total deficits from 2026 to 2035 are $1.4 trillion larger, while debt held by the public is projected to rise from 101 percent of GDP to 120 percent — exceeding historical highs.

Notably, the CBO says higher tariffs partially offset some of those increases by raising federal revenue by $3 trillion, but that also comes with higher inflation from 2026 to 2029.

Rising debt and debt service are important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth.

CBO projections also indicate that inflation does not hit the Federal Reserve’s 2 percent target rate until 2030.

A major difference is that the CBO forecasts rely on significantly lower economic growth projections than the Trump administration, pegging 2026 real GDP growth at 2.2 percent on a fourth-quarter comparison basis, fading to an average of about 1.8 percent for the rest of the decade.

Trump administration officials in recent weeks have projected robust growth in the 3-4 percent range for 2026, with recent predictions that first-quarter growth could top 6 percent amid rising investments in factories and artificial intelligence data centres.

CBO’s forecasts assume that tax and spending laws and tariff policies in early December remain in place for a decade. The government’s fiscal year starts on October 1.

While revived investment tax incentives and bigger individual tax refunds provide a boost in 2026, the CBO said that this is attenuated by the drag from larger fiscal deficits and reduced immigration that slows the growth of the labour force.

Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center said “large deficits are unprecedented for a growing, peacetime economy”, though “the good news is there is still time for policymakers to correct course.”

‘Urgent warning’

Lawmakers have recently addressed rising federal debt and deficits primarily through targeted spending caps and debt limit suspensions, as well as deploying “extraordinary measures” when the US is close to hitting its statutory spending limit, though these measures have often been accompanied by new, large-scale spending or tax policies that maintain high deficit levels.

And Trump, at the start of his second term, deployed a new “Department of Government Efficiency”, which set a goal to balance the budget by cutting $2 trillion in waste, fraud and abuse; however, budget analysts estimate that DOGE cut anywhere between $1.4bn to $7bn, largely through workforce firings.

Michael Peterson, CEO of the Peterson Foundation, said the CBO’s latest budget projection “is an urgent warning to our leaders about America’s costly fiscal path.”

“This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilising our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”