Warner Bros Discovery urges investors to reject Paramount's £81bn hostile bid in favor of Netflix deal

Warner Bros Discovery's board on Tuesday urged shareholders to reject Paramount Skydance's £81 billion hostile takeover bid, arguing the offer is inadequate and inferior to Netflix's agreement to buy the film and streaming business. The board said Paramount's bid carries significant risk for investors and is not guaranteed by any backstop from the Ellison family, a claim Warner Bros Discovery said is false. The suit marks another dramatic turn in a high-stakes battle for control of the Hollywood studio behind iconic franchises and titles.

Paramount Skydance's unsolicited bid would seek to take control of Warner Bros Discovery's entire portfolio, including CNN, TNT Sports and the Discovery Channel. The move comes days after Netflix announced a £62 billion deal to acquire Warner Bros Discovery's film slate and its streaming business, a package that includes the film studio assets and the streaming operations behind major series. The Netflix agreement would place Netflix at the center of a vertically integrated slate spanning production and distribution, intensifying competition with traditional studios.

Warner Bros Discovery said Paramount had repeatedly claimed the backstop from the Ellison family was guaranteed, but the company insisted the backstop does not come from Larry Ellison personally and is instead tied to a family trust. The rejection of the backstop claim adds to concerns about how Paramount would finance and support a bid of this magnitude. The bid also relied on financing from Affinity Partners, the investment firm led by Jared Kushner, though Affinity has stated it is no longer part of Paramount's bid.

Warner Bros Discovery's leadership has framed the Netflix deal as the clearer path to value for shareholders. Chairman Samuel Di Piazza said he was confident that the merger with Netflix represents superior, more certain value, and the board has repeated that Paramount's offer remains inferior. The Netflix agreement, struck earlier this month, covers the Warner Bros studios and its streaming business, including the IP and distribution framework that powers some of the most-watched content on the platform, such as high-profile dramas and fantasy franchises.

The confrontation underscores a broader shift in media economics as streaming platforms seek scale and control over content libraries. Netflix has been expanding its film and television footprint while traditional studios wrestle with how to monetize catalogs in a changing home entertainment market. Paramount, meanwhile, has sought to leverage its own library of enduring properties, including The Godfather and Top Gun, to justify a larger, all-encompassing takeover that would reshape ownership of a wide array of assets beyond film production.

Industry observers note that the deal dynamics hinge on more than price. They are watching who ultimately controls the distribution rights, the cadence of licensing agreements for sports networks, and the governance structure of a combined company. The Netflix proposal would potentially deliver greater strategic alignment for Warner Bros Discovery's IP and streaming operations, while Paramount's bid would consolidate a broader set of assets under a single corporate umbrella that may face integration and financing challenges in the years ahead.

Investors will be closely watching how Warner Bros Discovery's shareholders respond in the coming weeks, including any formal votes or negotiations that could influence whether the Netflix deal or Paramount's bid gains momentum. The clash reflects a broader competition for control of premier intellectual property assets as traditional studios navigate a rapidly evolving entertainment landscape with streaming at the core of strategy.

As the market weighs the options, another image of the corporate landscape is reflected in branding materials and logos that accompany the public narrative around these moves.

The outcome of this battle will be watched not only by shareholders but by competitors and content creators who are keen to understand how consolidation may shape pricing, licensing, and the cadence of future releases in an industry undergoing rapid transformation.