The battle for control of Warner Bros. Discovery has intensified as streaming giant Netflix, along with rivals Paramount and Comcast, have submitted improved, second-round bids. This follows Warner Discovery effectively putting itself up for sale in October after receiving unsolicited offers.
The Second Round of Bids: A Cash-Heavy Play
According to people familiar with the negotiations, Netflix made a second offer on Monday, December 2, 2024, that is primarily cash-based. The company is actively working to secure tens of billions of dollars in financing to fund this potential mega-purchase of Warner Discovery's entertainment and streaming assets. Netflix's interest is specifically in the coveted studios, their vast content libraries, and the HBO Max streaming service, not the cable television networks.
Not to be outdone, Paramount, led by CEO David Ellison and backed by his family and RedBird Capital Partners, also tabled an improved bid. Unlike Netflix, Paramount's offer is for the entire Warner Discovery empire, which includes cable networks like CNN, TNT, and TBS. Separately, Comcast Corp., the parent of NBCUniversal, has also submitted a second bid, mirroring Netflix's focus on the studio and streaming assets while avoiding the cable channels. The specific financial terms of the new offers from Paramount and Comcast remain undisclosed.
Regulatory Hurdles and Industry Concerns
Any potential acquisition, particularly one involving Netflix and HBO Max, is expected to face significant regulatory scrutiny. Officials at the U.S. Department of Justice have reportedly expressed concerns that Netflix owning HBO Max would concentrate too much power in the streaming marketplace. High-level White House officials have also recently held a meeting where concerns about a Netflix-Warner Discovery deal were discussed.
Analysts note that other suitors are not immune to scrutiny. Both Paramount and Comcast already possess major production studios, and a merger with Warner Discovery would create a media behemoth, raising alarms in the creative community about reduced competition. Furthermore, a Paramount-Warner Discovery union would consolidate a huge portfolio of cable networks, combining Paramount's MTV and Nickelodeon with Warner's CNN and Food Network. A merger of CNN with Paramount's CBS News could also trigger debates about media consolidation.
What Happens Next in the High-Stakes Auction?
All parties are now awaiting a response from Warner Discovery's board. The company has indicated its desire to conclude the auction process around Christmas. Warner Discovery is also proceeding with a parallel plan to split itself into two separate companies: one housing the studio and streaming assets, and the other containing its global cable network operations. It is currently unclear if there will be a third round of bidding.
The outcome of this bidding war could dramatically alter the global media landscape. Netflix, while the largest subscription streaming service in the U.S., ranks sixth in total TV usage behind platforms like YouTube, Comcast, and Paramount, according to Nielsen data. Acquiring Warner Discovery's assets would be a transformative move for any of the contenders, granting unprecedented control over iconic film franchises, television series, and direct access to millions of subscribers.
