Warner Bros snubs Paramount again - what this means for TV streaming
Warner Bros Discovery has swatted away Paramount Skydance for a second time. The studio behind Superman and Harry Potter branded the latest $108.4 billion takeover bid a debt-fueled gamble that would put shareholders in the firing line. In a blunt letter to investors, the board said Paramount’s revised offer still amounts to the biggest leveraged buyout in history — and one riddled with execution risk — and urged shareholders to reject it outright.Warner Bros backs Netflix bid Instead, Warner Bros is sticking with rival suitor Netflix, whose $82.7 billion cash-and-stock proposal is seen as cleaner, safer and far more likely to close. The rejection keeps alive one of Hollywood’s most ferocious takeover battles, as legacy studios scramble to bulk up in the streaming wars while traditional TV revenues wither. The outcome will reshape the balance of power in US media. A Paramount-Warner tie-up would create a formidable rival to Disney, combining two major studios, two TV networks and two streaming platforms. Warner Bros’ board said Paramount’s proposal would load the combined company with around $87 billion in debt, pushing the already smaller studio into junk territory and putting cash flow under severe strain. Even after Paramount sweetened its bid with a personal $40 billion equity guarantee from Oracle billionaire Larry Ellison, the board said the offer still failed to cover the real costs and risks. Paramount terms deemed too risky The board also warned Paramount’s terms would restrict Warner Bros’ operations, including blocking plans to spin off its cable TV networks into a separate public company called Discovery Global. Put simply, Warner Bros said shareholders were being asked to take on huge downside risk for too little upside. Paramount’s market value sits around $14 billion. Netflix’s is closer to $400 billion. Warner Bros pointed out that Netflix brings investment-grade credit, a proven streaming engine and far fewer financing hurdles — even if its headline offer looks smaller on paper. Warner Bros shares closed at $28.47 on Tuesday, hovering near Netflix’s offer price. But regulators are already circling. Lawmakers from both parties have voiced concern about further consolidation, and President Donald Trump has said he plans to weigh in.
