Netflix finds itself in a showdown with one of the world’s wealthiest families as it seeks to acquire Warner Bros Discovery. The streaming company is reportedly switching to an all-cash offer for its $83 billion deal, a move designed to counter a hostile $108.4 billion bid from Paramount Skydance, backed by the Ellison family.
Larry Ellison, the co-founder of Oracle, has provided a $40 billion personal guarantee for Paramount’s bid. Despite this, WBD’s board has rejected the offer, citing the risks of the associated debt. Paramount is now attempting a boardroom coup to force the deal, prompting Netflix to accelerate its own timeline.
Netflix’s all-cash offer is intended to win over shareholders by offering immediate value. The deal focuses on WBD’s studio and streaming assets, including franchises like Batman and Harry Potter. WBD’s linear networks, such as CNN and the Cartoon Network, would be spun off and are not part of the Netflix purchase.
The battle for WBD has attracted the attention of US regulators. Politicians are worried that a Netflix-WBD merger would reduce competition in the streaming market, potentially harming consumers. This political scrutiny is growing as the deal moves forward.
Investors, however, seem to prefer Netflix’s strategy. WBD shares rose 1.6% on the news, suggesting that the market values the safety of Netflix’s cash over the high-stakes gamble of the Ellison bid. The outcome will determine who controls the future of one of Hollywood’s biggest content libraries.
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