As temperatures drop across the United States, the competition between Netflix and Paramount for Warner Bros. is intensifying. Recent executive interviews featured in The Financial Times provide the latest details on the ongoing tussle. Netflix co-CEO Greg Peters outlined why he believes their bid, which has been accepted and reaffirmed, outshines David Ellison’s multiple offers.
Peters pointed out that Ellison’s Paramount Skydance is already burdened with considerable debt, which raises concerns about its ability to successfully manage an all-cash offer of $30 per share. He described such a deal as potentially disastrous for financing. Addressing these concerns, Larry Ellison, the father of David Ellison and Oracle’s founder, has stepped in, pledging to personally support the Paramount bid.
Market observers, including Wall Street and the media, are anticipating a larger cash bid from Paramount. However, Peters cautioned that without Larry Ellison’s financial backing, the chances of Paramount succeeding in this endeavor are slim. He questioned the feasibility of any substantial leverage that Paramount could muster to raise their offer, emphasizing the unpredictability of such a scenario.
In response, Gerry Cardinale, the founder of RedBird Capital and Paramount Skydance’s second-largest shareholder, contested Peters’ assertions, claiming that their leverage is not as constrained as suggested. He humorously dubbed the Netflix deal the “Harry Houdini of deals,” drawing parallels to the famous escapologist while casting doubt on the viability of Netflix’s $83 billion all-cash offer for Warner Bros., which also encompasses HBO’s streaming and linear businesses.
Peters expressed skepticism regarding the credibility of Paramount’s $108 billion bid for the entire company, which includes Discovery’s Global Linear Networks assets and Discovery+. He indicated that the Warner Bros. board shares this view, as does the sentiment among Warner shareholders.
Amid these developments, David Ellison has sought to sway Warner Bros. Discovery (WBD) shareholders through personal appeals, asking them to tender their holdings before the upcoming investor meeting in a bid for a hostile takeover. However, Peters noted that only a “very small” fraction of WBD shares had been tendered, with approximately 168.5 million out of 2.45 billion shares reported as tendered by January 21.
This ongoing battle presents a significant moment in the media landscape, reflecting the fierce competition among major industry players as they vie for control and influence in the evolving entertainment sector. The outcome remains uncertain, but one thing is clear: both companies are prepared to make bold moves to secure their future positions.