Paramount makes hostile bid for Warner Bros., including CNN, Turner networks
The fight for Warner Bros. Discovery has become an all-out bidding war.
Days after Netflix announced its plans to acquire the storied Hollywood institution’s studio and streaming businesses, Paramount has launched an all-cash offer for the entirety of the company. But unlike Netflix, Paramount wants more than the Warner Bros. studio, HBO and HBO Max. Paramount also wants traditional networks like the Atlanta-based CNN, TNT and TBS.
In a news announcement, Paramount, led by Chairman and CEO David Ellison, said its offer provides a “superior alternative” to the Netflix transaction and a speedier pathway toward regulatory approval. Netflix’s offer also exposes WBD shareholders to a “complex and volatile mix” of equity and cash, Paramount said. Paramount also warned a Netflix deal creates a risk of higher prices for consumers, lower pay for content creators and talent, and “the destruction of American and international theatrical exhibitors.”
The salvo is the culmination of weeks of speculation that Paramount was assembling a bid for WBD.
“We’re really here to finish what we started,” Ellison told CNBC on Monday after announcing the bid. “When you combine (Netflix) … with (HBO Max), that creates a company that has unprecedented market power, north of 400 million subscribers,” Ellison said. “The next largest competitor is Disney, with just under 200 million. That’s bad for Hollywood.”
Paramount’s all-cash offer amounts to $30 per WBD share, while Netflix’s cash and stock transaction is $27.75 per share.
If successful, the deal would create a combined portfolio of coveted assets, like DC Comics, “Harry Potter” and a massive catalog of MGM classics such as “Gone With the Wind,” and a hefty linear television portfolio spanning MTV, the Turner properties, BET and premium cable mainstays HBO and Showtime.
Notably, it would unite two major media organizations in CBS News and CNN, moving the latter into uncharted territories as it becomes part of a media empire helmed by Ellison, who maintains a close relationship with President Donald Trump via his father, and Oracle co-founder Larry Ellison. The private equity firm helmed by Jared Kushner, Trump’s son-in-law, is also one of the backers in Paramount’s offer. It would also mark the second megamerger Paramount has pursued in less than two years.
Neither WBD nor Netflix has commented publicly on Paramount’s offer. At a UBS Global Media and Communications conference in New York on Monday afternoon, Netflix CEO Ted Sarandos said the move was “entirely expected.” Sarandos said his company and WBD have a “deal done” and believe it’s a “great way to create and protect jobs in the entertainment industry,” according to the Hollywood Reporter.
Whether you’re a current or former Turner employee in Atlanta or a mere subscriber to any of the two companies’ properties, here’s what this deal means for you.
What’s different about this deal?
Paramount’s offer includes WBD’s linear networks segment, whereas Netflix’s offer included only the company’s studio and streaming arms. For much of this year, WBD has planned to split this part of the business off into its own company by 2026, citing losses in advertising dollars and viewership owing to the decline of the cable business. The company, to be called Discovery Global, would feature legacy cable networks, including CNN and the other legacy Turner networks, digital products such as Discovery+ and Bleacher Report, and would be saddled with much of the company’s debt.
As it stands now, Paramount is also less of a dominant leader in streaming than Netflix. According to Nielsen, Netflix accounts for the second-largest share of streaming viewership of all platforms in the United States. Warner Bros. Discovery, which includes HBO Max, sits at No. 9. Paramount is No. 7.
But Paramount’s offer isn’t without its own antitrust concerns. Both Paramount and WBD are two major television operators, amounting for much of what Americans watch on television.
What else is Paramount promising?
In its news release, Paramount is emphatic that its offer will reinvigorate the media industry and enhance competition. The company created a separate website called “Stronger Hollywood” to tout the deal.
Paramount says it will maintain WBD’s current theatrical slate and is committed to releasing 30-plus films per year in cinemas with a “healthy traditional window.”
The Netflix transaction sparked outcry from union groups, theater owners and other stakeholders in Hollywood over the future of theatrical releases. Paramount includes some of these comments in its public investor presentation. It also said it will maintain the studios of both companies and focus on attracting and retaining talent to grow content for their combined services.
If combined, the two companies would offer a better-scaled suite of cable networks, Paramount said. This is attractive for various reasons. Paramount says it could create a stronger division capable of managing the structural declines in the linear television business, provide advertisers with more appealing options of cross-channel sales and improve cash flow.
Paramount also noted its close technology relationship with Oracle and its ecosystem will provide WBD with “significant engineering and innovation opportunities.”
What does this mean for consumers?
Paramount says the combination of its Paramount+ streaming service and HBO Max would offer consumers more choice and value by creating a competitor to the incumbent dominant streamers. It is unclear what the combined service would look like and whether rates would be higher or lower than separate subscriptions to each service.
Consumers will also see more films in theaters and would benefit from a “higher spend on content,” the company said in its news release.
What does this mean for Turner networks?
Paramount’s news release did not mention WBD’s planned spinoff of its cable properties. It is clear Paramount sees value in retaining WBD’s linear networks and sees efficiencies in creating a larger television portfolio. Exact plans for any or each of the properties haven’t been detailed.
One property is not like the others: CNN, which has become somewhat of a political football in the weeks leading up to Netflix’s announcement, as other suitors Comcast and Paramount were submitting bids for the company. There were concerns that a potential acquisition by Paramount, led by the Trump-allied Ellisons, would lead to ideological shifts at the news organization. The same concerns were sparked after Paramount acquired media company The Free Press earlier this year and appointed its right-leaning co-founder Bari Weiss as the editor-in-chief of CBS News.
In his CNBC interview, David Ellison said he wants to see a combined CNN-CBS news operation serve as “a scaled news service that is basically, fundamentally, in the trust business” that speaks to “the 70% of Americans that are in the middle.”
CNN is in the midst of a digital transformation as it battles the same declines in viewership and advertising dollars as other cable television brands.
This fall, the organization launched a new subscription video service called CNN All Access. Worth noting is that the organization’s previous streaming venture, CNN+, was killed as a casualty of the merger between WarnerMedia with Discovery Inc. that formed WBD. All Access is not an identical direct-to-consumer product, but serves many of the same purposes.
Mark Thompson, CNN’s chairman, told employees in a memo Friday that the 2026 budget for organization’s news division would increase and had already been approved by WBD leaders David Zaslav and Gunnar Wiedenfels.
About the Author
Savannah Sicurella is an entertainment business reporter with The Atlanta Journal-Constitution.
