Warner vs Paramount vs Netflix: What the new filing reveals about Hollywood’s biggest takeover fight

Warner vs Paramount vs Netflix: What the new filing reveals about Hollywood’s biggest takeover fight

Warner Bros Discovery’s board has taken an unusually firm public stand against Paramount’s hostile $108 billion offer, telling shareholders it is inferior to an $83 billion deal already agreed with Netflix. The recommendation, disclosed in a detailed filing this week, adds new texture to a takeover battle that could redraw the balance of power in Hollywood.

At the heart of the board’s argument is certainty. Warner’s directors are signalling that the Netflix transaction offers cleaner financing, fewer governance risks and a faster path to completion than Paramount’s more complex proposal, the Financial Times reported.

One of the most striking disclosures concerns Warner chief executive David Zaslav. According to the filing, early discussions with Paramount’s backers included an offer to make him co-chief executive and co-chair of a combined company, alongside a compensation package potentially worth several hundred million dollars.

Zaslav told the board he rejected any such discussions as inappropriate at that stage. Still, the revelation underscores how personal incentives can loom large in takeover negotiations, and why boards are keen to document how those conversations unfolded.

The deal is already proving lucrative for Wall Street. Warner’s advisors stand to earn a combined $225 million in fees if a transaction closes, split between Allen & Co, JPMorgan and Evercore. The size of the payouts places the deal among the year’s most expensive advisory mandates, reinforcing how fiercely banks compete for a seat at the table in media consolidation.

Warner’s filing also sheds light on a key unresolved question: the value of its cable networks, including CNN and Discovery. The company acknowledged receiving interest from multiple parties, but said proposals were either incomplete or not immediately actionable. One bid valued a slice of the business at $25 billion, but stopped short of offering a full breakup solution.

This matters because Paramount has repeatedly argued that Warner’s cable assets are underappreciated, while Netflix’s bid effectively sidesteps the question by focusing on studios and streaming.

Comcast, another suitor, put forward what appeared to be the highest headline valuation. But the offer relied heavily on stock rather than cash, would have left Warner shareholders with a minority stake, and came with complex governance arrangements. The board appears to have concluded that the theoretical upside was outweighed by execution risk.

The filing paints a picture of talks turning increasingly hostile. Warner accuses Paramount of attempting to bypass formal channels by approaching directors directly, despite non-disclosure agreements. It also describes a legal letter from Paramount’s advisors as a pressure tactic that backfired, hardening opposition inside Warner’s boardroom rather than softening it.

Financing credibility emerges as a central concern. Warner repeatedly sought personal guarantees from the Ellison family to backstop Paramount’s equity commitments. In the end, the guarantees came from a family trust rather than individuals, a shift Warner says raised red flags given the scale of funding required.

Warner also set a clear final-bid deadline of December 1, warning bidders not to expect further rounds. Netflix complied and made clear it would walk away if a decision was delayed. Paramount, by contrast, continued signalling that it could improve its offer after the cutoff, a move the board appears to have viewed as undermining process discipline.

Whatever the outcome, the saga highlights how consolidation in the streaming era is as much about governance, trust and execution as headline valuations. Warner’s filing suggests its board has prioritised deal certainty over size, betting that shareholders will prefer a cleaner exit to a larger but more fragile promise.

The next few weeks will show whether investors agree.