This is not merely a “who buys whom” transaction - it is a potential redefinition of who gets to decide what stories are told, how they are distributed and which kinds of creative ventures get funded, says John Colley, Professor of Practice at Warwick Business School.
The bidding war for Warner Bros. Discovery (WBD) in late 2025 has swiftly transformed the entertainment landscape. What began as Netflix’s high-profile attempt to acquire WBD’s studio and streaming assets escalated dramatically when Paramount Skydance responded with a hostile, all-cash tender offer aimed directly at shareholders. Backed by major Gulf investors and a wide network of financiers, Paramount’s move raises sharp questions about who truly benefits. The result is a contest driven less by rational strategy and more by ambition, prestige and the race to claim one of Hollywood’s crown jewels.
Paramount’s proposal, $30 per share, valuing WBD at roughly $108.4bn, surprised many. As a fully cash bid, Paramount is offering not only a higher price but also greater certainty: immediate liquidity, no volatility associated with stock-based consideration, and a single, comprehensive acquisition of WBD’s studios, streaming platforms and cable networks. It is also promoting a faster path to completion by avoiding the regulatory complications that a Netflix–WBD combination will inevitably face across multiple jurisdictions.
Any sense of value has been completely lost in the rush to secure these prestigious assets. It is clearly no longer about fundamental valuation; instead, status, prestige and ego seem to be the driving forces behind this bidding frenzy, which defies conventional logic. Netflix’s bid was 121% above WBD’s undisturbed share price before the even larger Paramount bid emerged. The sale process has involved limited due diligence, which increases risk—they are essentially buying blind, with no certainty about what might be discovered later.
The only parties celebrating are the advisors, who stand to earn over $1bn from the deal, and WBD’s shareholders, for whom Christmas has come early.
However, Paramount’s bid does offer several advantages over Netflix’s. It is around 8% higher, entirely in cash, and avoids locked-in shares that could decline in value before they can be sold. Competition issues are also unlikely, as Paramount has a relatively small share of the streaming market. This would speed up the transaction compared with the Netflix bid, which could face lengthy regulatory reviews across multiple countries, including the US. Finally, Paramount’s offer includes all of WBD’s assets, whereas Netflix’s proposal would leave the cable networks requiring disposal.
But there are also three clear drawbacks to Paramount’s bid. First, it is hostile, and neither shareholders nor management typically favour such offers, although the scale of this one may influence their stance. Second, the involvement of Middle Eastern investors in the equity structure may not be viewed positively in the US. And finally, the most likely outcome remains Netflix returning with a higher, negotiated bid.
John Colley is also the author of ‘The Unwritten Rules of M&A: Mergers and Acquisitions that Deliver Growth—Learning from Private Equity’.
