After Paramount announced it was pursuing a 12-digit hostile bid for Warner Bros. Discovery on Monday, the only certainty surrounding the future of the company is more uncertainty.
Three days after Warner Bros. Discovery confirmed a merger with Netflix in an $80 billion deal, Paramount countered with a hostile bid over $100 billion that hit $30 per share – over two dollars more than the Netflix bid.
But both deals are fraught with regulatory obstacles, politicians on both sides decrying the deal economically and politically and an almost certain massive regulatory challenge.
As far as All-Elite Wrestling, a source speaking to SEScoops said AEW would likely land on linear channel spin-off Discovery Networks. According to Zaslav and various reports, Netflix plans to keep HBO Max as a separate streaming service.
The spin-off, which is expected to be completed in the spring, would be followed by development of a TNT Sports app. AEW’s status with Paramount would be less certain.
Paramount/Skydance CEO David Ellison has said it plans to shut down HBO Max and place its content on the Paramount Plus app. The company’s offer is for both its streaming and studio assets as well as its linear TV deals. AEW will start the second year of its three-year deal with WBD in January, with a fourth-year option for 2028.
Where AEW could end up could be moot if the expected lawsuits and regulatory investigations take place. The lawsuits alone could take years, maybe beyond AEW’s contract with WBD if it gets ugly. Paramount is expected to push for the SEC to stop a merger with Netflix based on anti-trust issues. Paramount also has its own regulatory issues and mounting concerns over the debt the company has collected in just months of ownership by Ellison. If WBD and Paramount combine, their linear TV reach would have more market share than Disney, the current No. 1.
While WBD, Hollywood and regulators sort out the Netflix merger agreement and Paramount’s hostile bid, a possible Netflix/Comcast combo deal to make the merger more regulator-friendly is a possibility.
One source said Comcast was the best culture fit for WBD given Zaslav’s previous NBC stint.The source said theme parks are a factor that has been ignored by the trade publications and business press. Last week, Bloomberg reported that Universal Theme Parks was considering licensing DC characters from Warner Bros. for new rides. Marvel characters have been featured at the parks for years. Comcast owns Universal Theme Parks while DC is owned by WBD.
Comcast dropped out of the bidding for WBD late last week. The company was offering stock as part of a merger, but was out-bid by Netflix, who took on loans for its final bid, and Paramount, which partnered with several hedge funds and sovereign funds from the Saudis, Abu Dhabi and Qatar.
One constant said by multiple sources is not to expect any resolution to WBD ownership anytime soon, unless something remarkable were to happen. Any final decision could take years and the end result could be a situation where “everyone gets a little bit of something,” where multiple companies are involved in order to get the states, unions, companies and regulators on the same page.
According to filings from Paramount with the SEC, the WBD and Netflix merger would take a year to 18 months to be completed, that’s without considering the dozens of lawsuits from unions, viewers, regulators, state attorney generals, not to mention a public that’s tired of corporate media merger fever while subscription prices rise and more ads are shoved onto streaming programs. Paramount said it could complete a merger in 12 months, which it offered as a selling point to WBD shareholders.
The Saudi Arabian PIF, as well as fund with Qatar and Abu Dhabi, totaled $24 billion of the hostile offer made to WBD shareholders on Monday. In comparison, the Ellisons have put up $12 billion. Apollo Group Management, Citi and Bank of America have contributed $54 billion, according to Alex Sherman of CNBC.
Sara Fischer of Axios said the Saudi and Middle East portion of the bid was left out of Paramount’s press releases today. When asked about what voting power the three Middle East funds would have, Ellison and other execs at Paramount haven’t given an answer. According to Lucas Shaw of Bloomberg, a WBD souce said they expected the Saudis to own the entire company by the time the process was over, if it were to go through.
Lauren Hirsch of the New York Times reported China’s Tencent fund, as well as money from Jared Kushner’s Affinity fund. Film critic John Rocha gave rundown of the problematic history of the backers helping Paramount, and it wasn’t pretty.
The involvement of three Middle Eastern government funds and a controversial Chinese fund may have helped Paramount with a better bid, but it’s certain to complicate the regulatory approval path.Senate Majority Leader John Thune and Senator Elizabeth Warren both voiced concerns with the hostile bid, stating they both had major regulatory concerns. Warren said she was concerned over the Ellisons\’ marketing of having Trump in their quarter and willing to change CNN to get the bid his approval. President Trump was asked about the hostile bid on Monday; he said he had no opinion of Paramount as a company. Trump has expressed issues and concerns with the Netflix merger as bad for the market.
The Ellisons ‘trump’ card in its negotiation (which is now on offer seven) with WBD has been President Trump, who is a friend of Larry Ellison, father of Paramount President David Ellison, the second richest man alive. That could have taken a hit over the weekend after Majorie Taylor Greene’s interview with 60 Minutes on Sunday. Greene, who has criticized the administration over the Jeffrey Epstein story. Trump blasted CBS News over the interview on Truth Social, just weeks after Ellison placed Bari Weiss of The Free Press in charge of the network’s news and a couple months after Paramount paid a $16 million “pre-court” settlement with the Trump administration.
The Paramount board was meeting late on Monday to discuss whether it should offer another hostile bid by Tuesday morning. Ellison had said they had another bid to offer after Monday’s bid.Netflix has said it plans to keep HBO Max as a standalone service, according to Zaslav. It has also said it would continue to keep WBD\’s headlong focus on making movies (WBD was the No. 1 movie studio in terms of box office this year). This hasn’t assuaged fears from critics of Netflix, who have noted that trusting the company that has put many theaters out of business with the future of cinema is a hard buy.
