Warner Bros. rejects Paramount takeover again, urges investors to back Netflix deal

Warner Bros. Discovery on Wednesday again rejected a hostile takeover bid from Paramount, telling shareholders to continue supporting a proposed sale of its studio and streaming assets to Netflix.

The company said its board had reviewed Paramount’s latest proposal and concluded it does not offer sufficient value or certainty compared with the Netflix agreement, which Warner announced weeks earlier. Shareholders have been urged to tender their shares in favor of the Netflix deal ahead of a Jan. 21 deadline.

Board reiterates opposition to Paramount offer

In a letter to shareholders, Warner Bros. Discovery said its board determined that Paramount’s bid is not in the best interests of the company or its investors, despite recent changes aimed at strengthening the proposal.

“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed,” board chair Samuel Di Piazza Jr. said in a statement. He added that the Netflix agreement offers “superior value at greater levels of certainty.”

Paramount did not immediately respond to a request for comment. Its bid remains outstanding.

Competing offers with different structures

The competing proposals reflect sharply different visions for Warner Bros. Discovery.

Netflix has agreed to acquire Warner’s studio and streaming businesses for $72 billion. That deal would include the company’s television and film production operations, as well as streaming platforms such as HBO Max. Under a previously announced plan, Warner’s news and cable networks — including CNN and Discovery — would be separated into a standalone company.

Paramount, which is controlled by Skydance Media, has instead made a $77.9 billion offer for the entire Warner Bros. Discovery group. The proposal would fold Warner’s studios, streaming platforms, and cable networks into Paramount’s broader media portfolio.

Warner said Wednesday that it views Paramount’s bid as resembling a leveraged buyout, relying heavily on debt and imposing operating restrictions that could limit Warner’s ability to run its business during a prolonged transaction process.

Paramount seeks to bolster financing assurances

Paramount has sought to counter Warner’s concerns by strengthening the financial backing of its offer.

Late last month, Paramount announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison to support $40.4 billion in equity financing tied to the bid. Ellison is the father of Paramount chief executive David Ellison. Paramount also increased its proposed breakup fee to $5.8 billion if regulators block the transaction, matching the fee offered under the Netflix agreement.

Despite those changes, Warner said the revised terms still fall short of the certainty it sees in the Netflix proposal.

Regulatory scrutiny likely for either deal

Any transaction involving Warner Bros. Discovery is expected to face extensive regulatory review in the United States and abroad.

Given the size and market influence of the companies involved, a merger with either Netflix or Paramount would almost certainly draw scrutiny from the U.S. Department of Justice, which could seek to block the deal or require structural changes. Competition authorities in other countries are also expected to examine the transactions.

The process could take more than a year to resolve, and political considerations may also play a role. President Donald Trump has publicly suggested a willingness to involve himself in decisions over major corporate mergers, an unusual stance that adds another layer of uncertainty to the review process.

Industry groups warn of consolidation risks

Trade organizations across the entertainment sector have raised concerns about both proposed deals, warning that further consolidation could harm competition, jobs, and creative diversity.

Cinema United, which represents more than 60,000 movie screens worldwide, said in a statement to a congressional antitrust subcommittee on Wednesday that it remains “deeply concerned” about Netflix’s proposed acquisition. The group argued that Netflix’s streaming-first model could undermine theatrical releases and negatively affect theater workers.

Cinema United said its concerns extend to Paramount’s bid as well, cautioning that additional consolidation in the media industry could lead to job losses and fewer opportunities for independent and diverse filmmakers.

Shareholders face near-term decision

For now, Warner Bros. Discovery shareholders must decide whether to tender their shares in support of the Netflix transaction while Paramount’s hostile bid remains unresolved.

The board’s renewed rejection of Paramount’s offer underscores Warner’s position that, despite a higher headline valuation, the structure and financing of Paramount’s proposal carry greater risk. As regulatory scrutiny intensifies and industry opposition remains vocal, the outcome is likely to shape the future of Hollywood’s studio and streaming landscape for years to come.