Hollywood Showdown: Paramount and Netflix Battle for Warner Bros.

A high-stakes corporate showdown is playing out in Hollywood as Warner Bros. resumes negotiations with Paramount Skydance Corp., a move that could complicate its previously agreed sale to Netflix Inc..

The renewed engagement follows Paramount’s indication that it would lift its offer by at least $1 per share to $31 if Warner’s board agrees to reopen discussions. The revised bid adds fresh complexity to what is already one of the most significant media transactions in recent years.

Paramount’s Renewed Push for Warner Bros.

A “Best and Final” Offer on the Table

David Ellison, CEO of Paramount Skydance, is seeking to change the trajectory of one of Hollywood’s most closely watched acquisition battles. The reopening of negotiations enables Paramount to submit what is being described as a “best and final” offer, directly challenging Warner Bros.’ existing agreement with Netflix.

On Tuesday, February 17, Warner Bros. confirmed it would reengage with Paramount after receiving an updated proposal that enhanced certain deal terms. Paramount had previously stated it would increase its bid from $30 to $31 per share if formal discussions resumed.

This marks the first upward revision since Warner Bros. agreed in December to sell the majority of its operations to Netflix for $27.75 per share. Ellison, who assumed control of Paramount in August, initiated efforts to acquire Warner Bros. the following month.

Netflix Responds to Paramount’s Challenge

Seven-Day Negotiation Window

In response to Paramount’s latest move, Netflix granted Warner’s board a seven-day period to evaluate the new proposal. Paramount characterized Warner’s reopening of talks as “unusual,” pointing out that the company did not make “making the customary determination” that its $30-per-share bid could result in a superior proposal. Such a determination would have permitted Paramount to negotiate without a deadline constraint.

“Paramount is nonetheless prepared to engage in good faith and constructive discussions,” the company said in a statement.

Netflix co-CEO Ted Sarandos explained in an interview with a news agency that the streaming giant allowed the talks to resume because Paramount has been “making a ton of noise, flooding the zone with confusion” regarding the Netflix transaction. He added that the negotiation window will “give them seven days to put their money where their mouth is.”

Sarandos also argued that Paramount would encounter comparable regulatory barriers and could face significant leverage if it successfully acquires Warner Bros., which might lead to reduced film production. When asked whether Netflix would increase its offer, he replied, “Let them make a move and then we’ll see where the next step is.”

Financial Terms of Competing Bids

Netflix’s $72 Billion Deal

Warner Bros.’ board continues to unanimously recommend shareholder approval of its binding agreement with Netflix. The proposed transaction assigns a $72 billion valuation to the sale of Warner’s film and television studios along with its HBO Max streaming platform.

A shareholder vote regarding the Netflix agreement is set for March 20.

Paramount’s $77.9 Billion Proposal

Paramount’s competing proposal values Warner Bros. at $77.9 billion and is supported by billionaire Larry Ellison. Unlike the Netflix deal, Paramount’s bid covers the entire Warner Bros. enterprise, including cable television assets such as CNN and TNT, which are scheduled to be spun off under the Netflix arrangement.

Additionally, Paramount has committed to covering a $2.8 billion termination fee payable to Netflix should Warner exit the agreement. The company also offered to support Warner Bros.’ debt refinancing and pledged compensation to shareholders if the transaction does not close by Dec. 31.

Market Reaction

Following the announcement, Warner Bros. shares climbed 2.7% to close at $28.75 in New York trading. Netflix stock remained relatively steady at $77, while Paramount shares rose 4.9% to $10.83.

“Throughout the entire process, our sole focus has been on maximising value and certainty for WBD shareholders,” Warner Bros. CEO David Zaslav said in the statement.

Regulatory and Strategic Implications

Regulatory Scrutiny Ahead

Both acquisition proposals are expected to face substantial regulatory examination. Each bidder maintains confidence in its ability to navigate antitrust review more effectively than its rival. Beyond valuation, regulatory approval and broader concerns about media consolidation could significantly influence the final outcome.

Under the waiver provided by Netflix, Warner Bros. may continue discussions with Paramount until Feb. 23. If, after that period, Warner’s board determines that Paramount’s offer is superior, Netflix retains the right to match the latest bid to preserve its agreement.

A Transformational Industry Moment

Warner Bros., a studio with more than a century of cinematic history and the producer of iconic films such as Casablanca and Batman, along with hit television series including Friends, remains one of Hollywood’s most prized assets. The winner of this contest could substantially alter the balance of power in the global entertainment sector.

Paramount Skydance, formed last August following its merger with Skydance Media, views the acquisition as an opportunity to rapidly elevate its position within the industry. For Netflix, securing Warner Bros. would represent a landmark achievement, potentially solidifying its leadership in the evolving entertainment ecosystem.

Investor Sentiment and Shareholder Influence

Paramount continues to move forward with its tender offer while actively seeking shareholder resistance to the Netflix deal. The company has also announced plans to nominate a slate of directors at Warner Bros.’ upcoming annual meeting.

Certain investors have expressed support for Paramount’s bid. Ancora Holdings Group urged Warner’s board to reject the Netflix agreement and reconsider Paramount’s proposal. Pentwater Capital Management, identified as the seventh-largest Warner Bros. shareholder, has similarly encouraged engagement with Paramount. However, only 42.3 million shares—representing less than 2% of shares outstanding—have been tendered to Paramount thus far.

Conclusion

The contest for control of Warner Bros. has become one of the most pivotal corporate battles in contemporary media history. Netflix holds a signed and board-endorsed agreement, while Paramount has presented a higher overall valuation and continues pressing its case to shareholders.

Ultimately, the deciding factors will include price, regulatory approval prospects, financing considerations, and long-term strategic alignment. As the Feb. 23 negotiation deadline approaches, industry observers are watching closely. Whether Warner Bros. aligns with a dominant streaming platform or a rapidly expanding traditional studio backed by aggressive capital deployment, the outcome will shape the competitive landscape of global entertainment for years ahead.