Hollywood has been embroiled in one of its most significant studio battles, with Warner Bros. Discovery (WBD) at the center of an intense bidding war. This high-stakes conflict primarily pitted streaming giant Netflix against David Ellison's Paramount Skydance, ultimately concluding with WBD's board formally rejecting Paramount's hostile takeover bid and reaffirming its commitment to a "superior" merger agreement with Netflix.

The saga began with Paramount Skydance expressing interest in acquiring WBD, leading to an initial $19/share offer on September 14, 2025, from David Ellison to WBD CEO David Zaslav. This early proposal, which included a discussion of a multi-million dollar compensation package for Zaslav, was swiftly rejected by the WBD board due to significant undervaluation, lack of concrete equity financing details, and a structure that would grant the Ellison family voting control despite a minority economic interest. Despite this initial rebuff and subsequent rejections, Paramount Skydance, backed by tech billionaire Larry Ellison, escalated its offers through September to December 2025, reaching an all-cash bid of $30/share on December 4.

However, WBD’s board chose Netflix as the winning bidder, entering into a merger agreement on December 4, 2025, which was publicly announced on December 5. Under this deal, Netflix would acquire Warner Bros. studios, HBO, and HBO Max for $27.75 per share, largely comprising 84% cash and the remainder in Netflix stock. The agreement also stipulated the spin-off of Discovery Global, WBD's TV networks group, in Q3 2026. Netflix co-CEOs Ted Sarandos and Greg Peters expressed confidence in the deal, highlighting its benefits for consumers, creators, and stockholders.

Undeterred by WBD's decision, David Ellison launched a hostile takeover maneuver on December 8, 2025, taking Paramount Skydance's $30/share offer directly to WBD shareholders for the entire company. This aggressive move, initially backed by sovereign wealth funds from Saudi Arabia, Qatar, Abu Dhabi, and Jared Kushner’s Affinity Partners, later saw these foreign investors agree to forgo governance rights to mitigate U.S. national security review concerns. Affinity Partners eventually withdrew its participation. Paramount asserted that Larry Ellison's substantial net worth (approximately $240 billion) and the Lawrence J. Ellison Revocable Trust would backstop the equity financing.

On December 17, 2025, WBD's board unanimously rejected Paramount Skydance's $108 billion hostile takeover bid, advising shareholders to reject the offer. In a detailed letter to shareholders, the board outlined numerous critical reasons for its decision. They deemed Paramount's offer to provide "inadequate value" compared to Netflix's superior terms, which included $23.25 in cash, $4.50 in Netflix stock, and the value of Discovery Global shares. A major concern was the "illusory" nature of Paramount’s financing; the board stated that the "full backstop" from the Ellison family was misleading, relying instead on an "unknown and opaque revocable trust" for a $40.65 billion equity commitment, with limited liability for damages and lacking the certainty of a secured commitment.

Furthermore, the board criticized Paramount’s projected $9 billion in cost synergies (from a Paramount-Skydance merger and then with WBD) as overly ambitious and potentially detrimental to Hollywood, contrasting it with Netflix's more modest $2-$3 billion synergy targets. WBD's board highlighted the financial risk of Paramount's proposed capital structure, noting its high gross leverage ratio, compared to Netflix's investment-grade balance sheet. They also pointed out that Paramount's offer was not a binding merger agreement, could be terminated or amended at any time, and was incapable of completion by its stated expiration date due to lengthy regulatory approval processes. Accepting Paramount's offer would also burden WBD shareholders with substantial additional costs, including a $2.8 billion termination fee to Netflix and $1.5 billion in financing costs, which Paramount had not offered to reimburse. The board also stated that there was "no material difference in regulatory risk" between the two offers, despite Paramount's claims of a clearer path to approval.

Beyond the primary contenders, other parties showed interest. Kay Koplovitz, founder of USA Network, emphasized the often-overlooked value of WBD's cable networks (like CNN and TNT), arguing they hold significant strategic importance for marketing and maintaining vitality through news and sports, suggesting other studios might pursue WBD's entire portfolio. Comcast, owners of Universal Pictures, was identified as "Company A" and had made a bid involving combining WBD Streaming & Studios Business with its own related businesses, offering a headline price of $35.43 per share. However, WBD's board found Comcast's equity valuation uncertain and the transaction structure complex, leading them to accelerate discussions with Netflix. An unidentified "Company C" also proposed acquiring Discovery Global and a portion of WBD Streaming & Studios, but its proposal was deemed "not actionable."

The bidding war was further colored by personal dynamics, including reported "bad blood" between David Zaslav and David Ellison. Former President Donald Trump also weighed in, expressing a desire for new ownership of CNN and later criticizing the Ellisons. Despite Paramount's persistent efforts and public statements, the Warner Bros. Discovery board remained steadfast, advocating for the Netflix merger as the most beneficial and certain outcome for its shareholders, and bringing one of Hollywood's most contentious studio battles to a decisive close.