David Ellison advocates for Paramount to acquire Warner Bros. Discovery Channel
Warner Bros. Discovery Channel’s board of directors agreed on Friday to sell its studio and streaming assets to Netflix for $82.7 billion, a deal that many believe will reshape Hollywood. But just one weekend later, the plot changed: Paramount Skydance CEO David Ellison made a larger all-cash offer to acquire all of WBD’s assets for $108.4 billion, or $30 per share. The young media executive believes that by connecting directly with WBD shareholders, Paramount will be a better home for WBD and help preserve Hollywood’s legacy.
Ellison’s bid specifically included WBD’s television networks — CNN, TBS, TNT, etc. — which Netflix didn’t want. The proposal is reportedly backed in part by Ellison’s father, Oracle founder Larry Ellison, and RedBird Capital Partners, which also financed Skydance Media’s $8 billion acquisition of Paramount Global, which closed in August.
In an interview with CNBC scream box Today (December 8), Ellison called the Netflix acquisition “a terrible deal for Hollywood” and believed that Paramount’s offer would better serve customers and the industry. “As someone who has spent the last 15 years of his life making movies and TV shows, an industry I love, this is an existential moment for our business and we believe the service we provide is better for Hollywood. It’s better for customers and it’s good for competition,” he said.
Before Paramount entered the fray, much of the weekend’s discussion focused on what a Netflix acquisition might mean for the future of the entertainment industry. Hollywood industry associations — including SAG-AFTRA, the WGA and other groups — quickly began exploring ways to block the merger. Many of their concerns stem from fears that further consolidation will lead to job and wage losses, reduced competition, creative freedom and content diversity. There are also concerns about the theater business, given that Netflix co-CEO Ted Sarandos has long argued that watching movies in theaters is “obsolete.”
Some politicians have also raised red flags. Senator Elizabeth Warren called the proposed merger of Netflix and WBD a “nightmare” that could lead to “higher subscription prices and less choice.” President Donald Trump has also expressed skepticism about the deal.
Ellison believes the Paramount deal will alleviate antitrust concerns and actually increase competition by combining Paramount+ with WBD’s HBO Max to better compete with Netflix and Disney. A merger of the Netflix and WBD streaming services would create one of the largest platforms in the industry and would almost certainly trigger intense antitrust scrutiny. Netflix has more than 300 million users, while WBD’s streaming service has about 128 million users. By comparison, Paramount+ only has about 79 million. A merger with Paramount would likely face a smoother regulatory process due to its relatively small size.
Some analysts have speculated that the Ellison family’s close ties to Trump could give Paramount an advantage with regulators. Ellison said he had had “a great conversation” with the president since the campaign, but stressed that he “doesn’t want to speak for the president.”
Meanwhile, Trump called Netflix co-CEO Sarandos a “terrific guy” and a “great guy,” even as he expressed skepticism about a Netflix-WBD merger out of concerns about market dominance.
As of Monday afternoon, WBD said it would review Paramount’s offer and make a decision within 10 days. The board stressed in a statement that it “will not modify its recommendations related to the Netflix agreement.” Since WBD has already signed the agreement, if it accepts Paramount’s acquisition offer, it will need to pay a breakup fee of $2.8 billion. If the deal fails or fails to gain regulatory approval, Netflix would have to pay a breakup fee of $5.8 billion.
