Netflix and Paramount are locked in an epic tug-of-war for HBO and Warner Bros. — the historic film factory behind Batman, Harry Potter, Scooby-Doo, “Casablanca” and “The Matrix.”
Warner Bros. Discovery awarded the prize to Netflix, prompting Paramount to mount a hostile takeover bid valued at $108 billion for all of the Warner assets, which also include CNN, TBS, HGTV and TLC. The Larry Ellison-backed media company, run by his son David Ellison, has asked Warner shareholders to sell their shares to Paramount.
Warner Bros.’ sale has become the industry’s game of thrones.
The streaming king, Netflix, hopes to buy a chunk of the company — HBO, HBO Max, Warner Bros. film and TV studios and the 110-acre lot in Burbank — through its $82.7-billion deal. Not included are Warner’s basic cable channels, which are set to be spun off into a separate, publicly-traded company called Discovery Global.
Both deals would fundamentally reorder Hollywood and raise antitrust concerns. Netflix would boast more than 400 million subscribers worldwide, furthering its market dominance. And Paramount’s takeover would combine two major film studios and two leading news organizations, CNN and CBS News, under Ellison family control.
Billionaire Larry Ellison has stepped up, agreeing to personally guarantee part of Paramount’s bid for rival Warner Bros. Discovery.
Ellison’s personal guarantee of $40.4 billion in equity, disclosed Monday, ups the ante in the acrimonious auction for Warner Bros. movie and TV studios, HBO, CNN and Food Network.
Ellison, whose son David Ellison is chief executive of Paramount, agreed not to revoke the Ellison family trust or adversely transfer its assets while the transaction is pending. Paramount’s $30-a-share offer remains unchanged.
Warner Bros. Discovery’s board this month awarded the prize to Netflix. The board rejected Paramount’s $108.4-billion deal, largely over concerns about the perceived shakiness of Paramount’s financing.
Paramount shifted gears and launched a hostile takeover, appealing directly to Warner shareholders, offering them $30 a share.
“We amended this Offer to address Warner Bros. stated concerns regarding the Prior Proposal and the December 8 Offer,” Paramount said in a Monday Securities & Exchange Commission filing. “Mr. Larry Ellison is providing a personal guarantee of the Ellison Trust’s $40.4 billion funding obligation.”
The Ellison family acquired the controlling stake in Paramount in August. The family launched their pursuit of Warner Bros. in September but Warner’s board unanimously rejected six Paramount proposals.
Paramount started with a $19 a share bid for the entire company. Netflix has offered $27.75 a share and only wants the Burbank studios, HBO and the HBO Max streaming service. Paramount executives have held meetings with Warner investors in New York, where they echoed the proposal they’d submitted in the closing hours of last week’s auction.
On Monday, Paramount also agreed to increase the termination fee to $5.8 billion from $5 billion, matching the one that Netflix offered.
Warner Bros. board voted unanimously to accept Netflix’s $72-billion offer, citing Netflix’s stronger financial position, the board has said.
Three Middle Eastern sovereign wealth funds representing royal families in Saudi Arabia, Qatar and Abu Dhabi have agreed to provide $24 billion of the $40.4-billion equity component that Ellison is backing.
The Ellison family has agreed to cover $11.8-billion of that. Initially, Paramount’s bid included the private equity firm of Jared Kushner, Trump’s son-in-law, but Kushner withdrew his firm last week.
Paramount confirmed that the Ellison family trust owns about 1.16 billion shares of Oracle common stock and that all material liabilities are publicly disclosed.
“In an effort to address Warner Bros.’s amorphous need for ‘flexibility’ in interim operations, Paramount’s revised proposed merger agreement offers further improved flexibility to Warner Bros. on debt refinancing transactions, representations and interim operating covenants,” Paramount said in its statement.
Paramount has been aggressively pursuing Warner Bros. for months.
David Ellison was stunned earlier this month when the Warner Bros. board agreed to a deal with Netflix for $82.7 billion for the streaming and studio assets.
Paramount subsequently launched its hostile takeover offer in a direct appeal to shareholders. Warner Bros. board urged shareholders to reject Paramount’s offer, which includes $54 billion in debt commitments, deeming it “inferior” and “inadequate.” The board singled out what it viewed as uncertain financing and the risk implicit in a revocable trust that could cause Paramount to terminate the deal at any time.
Paramount, controlled by the Ellisons, is competing with the most valuable entertainment company in the world to acquire Warner Bros.
Executives from both Paramount and Netflix have argued that they would be the best owners and utilize the Warner Bros. library to boost their streaming operations.
In its letter to shareholders and a detailed 94-page regulatory filing last week, Warner Bros. hammered away at risks in the Paramount offer, including what the company described as the Ellison family’s failure to adequately backstop their equity commitment.
The equity is supported by “an unknown and opaque revocable trust,” the board said. The documents Paramount provided “contain gaps, loopholes and limitations that put you, our shareholders, and our company at risk.”
Netflix also announced Monday that it has refinanced part of a $59 billion bridge loan with cheaper and longer-term debt.
Dec. 22 (UPI) — Paramount Skydance amended its hostile bid to take over Warner Bros. Discovery, guaranteeing the backing of Larry Ellison.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount,” the company said in a press release. Ellison also agreed not to revoke the Ellison family trust or adversely transfer its assets during the pendency of the transaction.
Last week, WBD urged its shareholders not to accept Paramount’s bid, saying it wasn’t backed by billionaire Larry Ellison, father of Paramount’s CEO.
Paramount didn’t raise its bid of $30 a share, saying it believes the bid is superior. But it did raise its proposed reverse breakup fee to match Netflix’s offer.
“What we’ve done in this amended filing is we’ve cleared the brush of obfuscation around the offer,” said Gerry Cardinale, founder and managing partner of RedBird Capital Partners, on CNBC’s Squawk Box on Monday.
RedBird is an investor in Paramount Skydance and has committed to financing the proposed purchase.
Cardinale said the bid is backed by 1.2 billion Oracle shares in an irrevocable trust.
“Like we’ve done through the six bids that we’ve made, we are being responsive to what their concerns are,” Cardinale said.
Warner Bros. Discovery shares jumped 4% in early trading Monday, while Paramount shares rose almost 6%, CNBC reported. Netflix shares dipped slightly.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our $30 per share, fully financed all-cash offer was on Dec. 4, and continues to be, the superior option to maximize value for WBD shareholders,” David Ellison said in a statement. “Because of our commitment to investment and growth, our acquisition will be superior for all WBD stakeholders, as a catalyst for greater content production, greater theatrical output, and more consumer choice. We expect the board of directors of WBD to take the necessary steps to secure this value-enhancing transaction and preserve and strengthen an iconic Hollywood treasure for the future.”
A “60 Minutes” story on the Trump administration’s imprisonment of hundreds of deported Venezuelan migrants to El Salvador was pulled by CBS News Editor-In-Chief Bari Weiss shortly before it was scheduled to air Sunday night.
The unusual decision drew a sharp rebuke from Sharyn Alfonsi, the correspondent for the piece.
Alfonsi said the decision was motivated by politics, according to an email she circulated to colleagues and viewed by the Times. Alfonsi noted that the story was ready for air after being vetted by the network’s attorneys and the standards and practices department.
“It is factually correct,” Alfonsi wrote. “In my view, pulling it now — after every rigorous internal check has been met is not an editorial decision, it is a political one.”
According to the CBS News press department’s description of the segment, Alfonsi spoke to released deportees who described “the brutal and torturous conditions they endured inside CECOT,” one of El Salvador’s harshest prisons.
In a statement, a representative for CBS News said the report called “Inside CECOT” will air in a future “60 Minutes” broadcast. “We determined it needed additional reporting,” the representative said.
Weiss viewed the segment late Thursday, according to people familiar with the matter who were not authorized to comment publicly. She had a number of issues with story and asked for additional reporting, which could not be completed in time for airing on Sunday. A press release promoting the story went out Friday.
Weiss reportedly wanted the story to have an interview with an official in President Trump’s administration.
But Alonsi said in her email the program “requested responses to questions and/or interviews” with the the Department of Homeland Security, the White House and the State Department.
“Government silence is a statement, not a VETO,” Alfonsi wrote. “Their refusal to be interviewed is a tactical maneuver designed to kill the story.”
Alfonsi’s email said she learned the story was pulled on Saturday and that she had not discussed the matter with Weiss.
Even if Weiss’ concerns might be valid, the sudden postponement of a “60 Minutes” piece after it has been promoted on air, on social media and through listings on TV grids is a major snafu for the network.
For Weiss, it’s perilous situation as her every move as a digital media entrepreneur with no experience in television is being closely scrutinized.
As the founder of the conservative-friendly digital news site who was personally recruited by Paramount Chief Executive David Ellison, journalists at CBS News and media industry observers are watching to see if Weiss’ actions are tilting its editorial content to the right.
Trump recently said “60 Minutes” is “worse” under Paramount’s new ownership following an interview with Rep. Marjorie Taylor Greene, in which she was highly critical of the president and his administration.
Paramount acquired the Free Press for $150 million as part of the deal to bring Weiss over. Her first major move was to air a highly sympathetic town hall with Erika Kirk, the widow of slain right-wing activist Charlie Kirk. Erika Kirk has taken over as head of Turning Point USA, the political organization her husband founded.
Warner Bros. Discovery has sharply rejected Paramount’s latest offer, alleging the Larry Ellison family has failed to put real money behind Paramount’s $78-billion bid for Warner’s legendary movie studio, HBO and CNN.
Paramount “has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family,” Warner Bros. Discovery’s board wrote in a Wednesday letter to its shareholders filed with the Securities & Exchange Commission.
“It does not, and never has,” the Warner board said.
For Warner, what was missing was a clear declaration from Paramount that the Ellison family had agreed to commit funding for the deal. A Paramount representative was not immediately available for comment Wednesday.
The Warner auction has taken a nasty turn. Last week, Paramount launched a hostile takeover campaign for Warner after losing the bidding war to Netflix. Warner board members unanimously approved Netflix’s $72-billion deal for the Warner Bros. film and television studios, HBO and HBO Max.
In its letter, the Warner board reaffirmed its support for Netflix’s proposal, saying it represented the best deal for shareholders. Warner board members urged investors not to tender their shares to Paramount.
Board members said they were concerned that Paramount’s financing was shaky and the Ellison family’s assurances were far from ironclad. Warner also said Paramount’s proposal contained troubling caveats, such as language in its documents that said Paramount “reserve[d] the right to amend the offer in any respect.”
The Warner board argued that its shareholders could be left holding the bag.
Paramount Chief Executive David Ellison has argued his $78-billion deal is superior to Netflix’s proposal.
(Evan Agostini / Evan Agostini/invision/ap)
Paramount Chairman David Ellison has championed Paramount’s strength in recent weeks saying his company’s bid for all of Warner Bros. Discovery, which includes HBO, CNN and the Warner Bros. film and television studios, was backed by his wealthy family, headed by his father, Oracle co-founder Larry Ellison, one of the world’s richest men.
In its letter last week to shareholders, asking for their support, Ellison wrote that Paramount delivered “an equity commitment from the Ellison family trust, which contains over $250 billion of assets,” including more than 1 billion Oracle shares.
In regulatory filings, Paramount disclosed that, for the equity portion of the deal, it planned to rely on $24 billion from sovereign wealth funds representing the royal families of Saudi Arabia, Qatar and Abu Dhabi as well as $11.8 billion from the Ellison family (which also holds the controlling shares in Paramount). This week, President Trump’s son-in-law Jared Kushner’s Affinity Partners private equity firm pulled out of Paramount’s financing team.
Paramount’s bid would also need more than $60 billion in debt financing.
Paramount has made six offers for Warner Bros., and its “most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind,” the Warner board wrote.
“Instead, they propose that [shareholders] rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding,” the board said.
Throughout the negotiations, Paramount, which trades under the PSKY ticker, failed to present a solid financing commitment from Larry Ellison — despite Warner’s bankers telling them that one was necessary, the board said.
“Despite … their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer,” Warner’s board wrote.
Board members argued that a revocable trust could always be changed. “A revocable trust is no replacement for a secured commitment by a controlling stockholder,” according to the board letter.
David Ellison has insisted Paramount’s Dec. 4 offer of $30 a share was superior to Netflix’s winning bid. Paramount wants to buy all of Warner Bros. Discovery, while Netflix has made a deal to take Warner’s studios, its spacious lot in Burbank, HBO and HBO Max streaming service.
Paramount’s lawyers have argued that Warner tipped the auction to favor Netflix.
Paramount, which until recently enjoyed warm relations with President Trump, has long argued that its deal represents a more certain path to gain regulatory approvals. Trump’s Department of Justice would consider any anti-trust ramifications of the deal, and in the past, Trump has spoken highly of the Ellisons.
However, Warner’s board argued that Paramount might be providing too rosy a view.
“Despite PSKY’s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger,” the Warner board wrote. “The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors.”
The board noted that Netflix agreed to pay a record $5.8 billion if its deal fails to clear the regulatory hurdles.
Paramount has offered a $5 billion termination fee.
Should Warner abandon the transaction with Netflix, it would owe Netflix a $2.8 billion break-up fee.
Warner also pointed to Paramount’s promises to Wall Street that it would shave $9 billion in costs from the combined companies. Paramount is in the process of making $3 billion in cuts since the Ellison family and RedBird Capital Partners took the helm of the company in August.
President Trump wants a very different kind of CNN if the cable news channel’s parent Warner Bros. Discovery changes hands.
As details emerge on the battle between Netflix and Paramount over control of the historic movie studio and its streaming and TV assets, Trump acknowledged he’s made it clear he wants new ownership and leadership at the network that has been the prime target in his attacks on the mainstream media over the last decade.
“I think the people that have run CNN for the last long period of time are a disgrace,” Trump told reporters Wednesday. “I don’t think they should be entrusted with running CNN any longer. So I think any deal should — it should be guaranteed and certain that CNN is part of it or sold separately.”
White House Press Secretary Karoline Leavitt echoed Trump’s sentiment Thursday from her lectern after a testy exchange with CNN anchor Kaitlan Collins. “Their ratings have declined, and I think the president rightfully believes that network would benefit from new ownership with respect to this deal,” Leavitt said.
Trump has said he will be “involved” in the government‘s regulatory review of a WBD deal. Injecting the president’s animus toward CNN — which goes back to his presidential campaign in 2016 — into the process has insiders at the network worried that journalistic independence will be sacrificed for the sake of a Warner Bros. Discovery deal.
CNN declined to comment.
A Wall Street Journal report said Paramount Chief Executive David Ellison has signaled to Trump administration officials he would make “sweeping changes” to CNN if his company took control. (A representative for Ellison declined comment.)
Ellison has said he would combine CNN’s newsgathering operations with Paramount’s CBS News, where conservative-friendly Bari Weiss has been installed as editor in chief. Such a move would follow the $16-million settlement Paramount reached with Trump earlier this year resolving a dispute over a “60 Minutes” interview featuring then-Vice President Kamala Harris.
But Trump said he wants to see a new CNN owner even if Netflix prevails. Netflix’s $72 billion offer does not include CNN or WBD’s other basic cable properties. Paramount has countered with a $78 billion offer.
What Trump desires is more favorable news coverage. But pandering to the White House could have a dubious outcome from a business standpoint for the next CNN owner.
The cable news landscape has evolved over the last decade as the country’s politics have become more polarized and tribal.
The trend helped the conservative-leaning Fox News and progressive MS NOW (formerly MSNBC), both of which have seen their audiences grow over that time even as the number of pay-TV homes has declined dramatically.
CNN has tried to stake out the middle ground, although its aggressive coverage of Trump’s first term created a perception it had moved left, especially as more commentary was added to its prime time programs.
CNN already saw the impact of attempting to bring more right-leaning voices to its program under Chris Licht, the executive brought in to run the network in 2022. He was under a mandate from Warner Bros. Discovery Chief Executive David Zaslav, who publicly said the network needed to appeal more to conservative audiences.
The network experienced an immediate exodus of viewers, putting it in third place behind MS NOW. CNN was generating $1.2 billion in profit earlier in the decade. This year, the figure is expected to be in the range of $675 million.
Jon Klein, a digital entrepreneur and former CNN president, said it would be folly for his former network to blatantly court conservatives again.
“You’re not going to convince all those Fox News viewers that suddenly CNN is friendly to them and their way of life,” he said. “These are much older viewers who don’t change their habits so easily. There has been mistrust that has been fostered over many years.”
Klein noted that even upstart right-wing networks that provide unwavering support of Trump — Newsmax and OAN — haven’t made a dent in Fox News’ dominance. MS NOW would be the beneficiary of any rightward shift by CNN, he added.
“It would accelerate the ratings slide and they become completely irrelevant,” said another former CNN executive who did not want to comment publicly.
Fox News does more than provide largely sympathetic coverage and commentary for Trump. Rupert Murdoch’s network has worked at forging a deep connection with viewers, which has made it the ratings leader since 2002.
The lineup of highly paid Fox News personalities is reliably in sync with the audience’s values and the hot-button issues that keep them tuned in. Viewer loyalty has helped the network attract hundreds of new advertisers in recent years, with some integrating patriotic messages into their marketing efforts.
“Fox is an incredibly well-oiled machine,” Klein said.
Klein said CNN and other legacy news organizations are better off focusing on developing an effective digital strategy to insure their future as traditional TV viewing declines, instead of chasing ideological balance.
Attempting to satisfy Trump’s desire for more positive coverage is a slippery slope. While Paramount appointed an ombudsman to CBS News and brought in Weiss — moves aimed at clearing the regulatory path for its merger with Skydance Media — Trump is still lashing out at coverage he doesn’t like.
After a “60 Minutes” interview with Rep. Marjorie Taylor Greene (R-Ga.) aired Dec. 7, in which she was highly critical of Trump, the president said the program is “worse” under new ownership.
The only significant move to attract conservative viewers under Weiss is her prime time interview with the widow of slain right-wing activist Charlie Kirk that airs Saturday.
“I think the prevailing wisdom over there is this notion that at least if they stay out of the clutches of Paramount, some rich philanthropist will buy them and they’ll be fine,” said the former CNN executive.
But if Netflix gets WBD without CNN, there is no guarantee it would not end up with a Trump-friendly owner if the network were spun off separately. The rank and file may wish for Laurene Powell Jobs, chair of the Atlantic, but could end up with a deep-pocketed right winger.
CNN Chairman Mark Thompson’s message to the troops is keep calm and carry on. “I know this strategic review has been a period of inevitable uncertainty across CNN and indeed the whole of WBD,” Thompson told staff in a recent memo. “Of course, I can’t promise you that the media attention and noise around the sale of our parent will die down overnight. But I do think the path to the successful transformation of this great news enterprise remains open.”
Trump’s anger toward CNN has become more personal as time has gone on. He has insulted reporters during press briefings and reportedly has told people he wants to see the firing of anchors Erin Burnett and Brianna Keilar.
Oddly enough, it was Burnett’s journalism that provided Trump with video for his most effective commercial of his 2024 campaign.
Burnett conducted the 2020 interview with Kamala Harris where the former vice president expressed her support for providing medical care to prisoners undergoing gender-affirming care. A clip of the segment was used in the commercial that said “Kamala’s for they/them, President Trump is for you.”
The sale of Warner Bros. — whether in pieces to Netflix or in its entirety to Paramount — is stirring mounting worries among Hollywood union leaders about the possible fallout for their members.
Unions representing writers, directors, actors and crew workers have voiced growing concerns that further consolidation in the media industry will reduce competition, potentially causing studios to pay less for content, and make it more difficult for people to find work.
“We’ve seen this movie before, and we know how it ends,” said Michele Mulroney, president of the Writers Guild of America West. “There are lots of promises made that one plus one is going to equal three. But it’s very hard to envision how two behemoths, for example, Warner Bros. and Netflix … can keep up the level of output they currently have.”
Last week, Netflix announced it agreed to buy Warner Bros. Discovery’s film and TV studio, Burbank lot, HBO and HBO Max for $27.75 a share, or $72 billion. It also agreed to take on more than $10 billion of Warner Bros.’ debt. But Paramount, whose previous offers were rebuffed by Warner Bros., has appealed directly to shareholders with an alternative bid to buy all of the company for about $78 billion.
Paramount said it will have more than $6 billion in cuts over three years, while also saying the combined companies will release at least 30 movies a year. Netflix said it expects its deal will have $2 billion to $3 billion in cost cuts.
Those cuts are expected to trigger thousands of layoffs across Hollywood, which has already been squeezed by the flight of production overseas and a contraction in the once booming TV business.
Mulroney said that employment for WGA writers in episodic television is down as much as 40% when comparing the 2023-2024 writing season to 2022-2023.
Executives from both companies have said their deals would benefit creative talent and consumers.
But Hollywood union leaders are skeptical.
“We can hear the generalizations all day long, but it doesn’t really mean anything unless it’s on paper, and we just don’t know if these companies are even prepared to make promises in writing,” said Lindsay Dougherty, Teamsters at-large vice president and principal officer for Local 399, which represents drivers, location managers and casting directors.
Dougherty said the Teamsters have been engaged with both Netflix and Paramount, seeking commitments to keep filming in Los Angeles.
“We have a lot of members that are struggling to find work, or haven’t really worked in the last year or so,” Dougherty said.
Mulroney said her union has concerns about both bids, either by Netflix or Paramount.
“We don’t think the merger is inevitable,” Mulroney said. “We think there’s an opportunity to push back here.”
If Netflix were to buy Warner Bros.’ TV and film businesses, Mulroney said that could further undermine the theatrical business.
“It’s hard to imagine them fully embracing theatrical exhibition,” Mulroney said. “The exhibition business has been struggling to get back on its feet ever since the pandemic, so a move like this could really be existential.”
But the Writers Guild also has issues with Paramount’s bid, Mulroney said, noting that it would put Paramount-owned CBS News and CNN under the same parent company.
“We have censorship concerns,” Mulroney said. “We saw issues around [Stephen] Colbert and [Jimmy] Kimmel. We’re concerned about what the news would look like under single ownership here.”
That question was made more salient this week after President Trump, who has for years harshly criticized CNN’s hosts and news coverage, said he believes CNN should be sold.
The worries come as some unions’ major studio contracts, including the DGA, WGA and performers guild SAG-AFTRA, are set to expire next year. Two years ago, writers and actors went on a prolonged strike to push for more AI protections and better wages and benefits.
The Directors Guild of America and performers union SAG-AFTRA have voiced similar objections to the pending media consolidation.
“A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less,” the union said.
SAG-AFTRA National Executive Director Duncan Crabtree-Ireland said the union has been in discussions with both Paramount and Netflix.
“It is as yet unclear what path forward is going to best protect the legacy that Warner Brothers presents, and that’s something that we’re very actively investigating right now,” he said.
It’s not clear, however, how much influence the unions will have in the outcome.
“They just don’t have a seat at the ultimate decision making table,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “I expect their primary involvement could be through creating more awareness of potential challenges with a merger and potentially more regulatory scrutiny … I think that’s what they’re attempting to do.”
