Warner Bros. Discovery’s board rejected Paramount Skydance’s hostile takeover bid again on Wednesday, reaffirming its support for Netflix’s $72 billion acquisition. The decision keeps alive what would be the largest media merger since the AT&T-Time Warner combination, and it’s already triggering antitrust concerns that could reshape how regulators approach entertainment industry consolidation.
The stakes extend far beyond corporate finance. This deal would give Netflix control of HBO, CNN, Warner Bros. film studio, and decades of intellectual property from Harry Potter to DC Comics. Combined with Netflix’s existing dominance in streaming, the merger would create an entertainment colossus unlike anything the industry has seen. And that’s exactly what has competitors, regulators, and creative unions worried.
The Competing Bids
Netflix announced its acquisition agreement on December 5, 2025, offering $27.75 per WBD share in a mix of cash and stock. The deal values Warner Bros. at approximately $72 billion (enterprise value of $82.7 billion when including debt). WBD shareholders would receive $23.25 in cash plus $4.50 in Netflix stock for each share they hold.
Three days later, Paramount Skydance made its move. The company submitted a hostile all-cash offer directly to WBD investors, valuing the company at $108.4 billion, or $30 per share. On paper, Paramount’s offer looks superior. But the WBD board unanimously concluded that the Paramount bid is “inferior” and recommended shareholders reject it.
Why would a board reject a higher offer? The answer involves execution risk and strategic logic. Paramount’s offer requires financing that hasn’t been fully secured. It would combine two companies that both carry substantial debt. And it would create a merged entity facing many of the same challenges that brought WBD to the negotiating table in the first place: too much content, not enough subscribers, and crushing debt from previous mergers that never delivered promised synergies.
Netflix’s bid, by contrast, comes from a company with $6 billion in cash on hand, positive free cash flow, and a track record of successful global expansion. Netflix can actually afford to buy Warner Bros. Paramount’s bid requires them to figure out how to pay for it, and financial markets aren’t fully convinced they can.
What the Deal Creates
If Netflix completes the acquisition, the combined company would control an unprecedented share of entertainment production and distribution. Netflix would gain HBO, historically the most prestigious brand in premium television. It would acquire Warner Bros. Pictures, one of the original Hollywood studios with a library spanning nearly a century. It would inherit DC Entertainment, the comic book empire behind Batman, Superman, and Wonder Woman. And it would absorb a substantial reality TV and news operation.
The deal explicitly excludes Discovery’s cable networks and CNN, which will be spun off into a separate publicly traded company called Discovery Global. This spin-off is expected to complete in the third quarter of 2026, before the Netflix merger closes. The separation acknowledges that traditional cable assets carry different economics than streaming and studio operations, and it simplifies the regulatory review by removing news media from the equation.
What remains after the split would give Netflix something it’s always lacked: a prestige brand. Netflix has produced acclaimed content, from “Squid Game” to “The Crown,” but it’s never had the cultural cachet of HBO. The network that produced “The Sopranos,” “The Wire,” “Game of Thrones,” and “Succession” commands a different kind of respect in the industry. That respect translates into the ability to attract top creative talent, which translates into the content that attracts subscribers.
The Antitrust Question
Paramount isn’t taking its rejection quietly. In a letter to the House Judiciary Committee’s antitrust subcommittee, Paramount’s chief legal officer Makan Delrahim argued that the Netflix-WBD combination is “presumptively unlawful.” Delrahim, who led the Justice Department’s antitrust division under President Trump’s first term, wrote that the merger “would further cement Netflix’s dominance in streaming video on demand.”
The antitrust argument has merit. Netflix already claims roughly 25 percent of U.S. streaming subscribers. Adding HBO Max’s subscriber base would push that share significantly higher. The company would control both production and distribution at a scale no competitor could match. Smaller studios and independent content creators might find themselves with fewer places to sell their work.
The Writers Guild of America immediately condemned the proposed merger, arguing it violates antitrust protections. The union fears that further consolidation will “squeeze out creative voices, reduce job opportunities, and drive up costs for consumers.” Hollywood creative guilds have watched industry consolidation eliminate competition for their services over the past two decades. Every merger that promised efficiency delivered layoffs. Every combination that promised synergy produced fewer buyers for scripts and fewer production deals for working writers.
Netflix has begun engaging with regulators, submitting its Hart-Scott-Rodino filing and meeting with the Justice Department and European Commission. The company remains “committed to working closely with WBD, regulators, and all stakeholders to ensure a smooth and successful transaction.” That language suggests Netflix anticipates a thorough review and is prepared to make concessions if necessary.
What Happens Next
The merger’s path forward involves several moving parts. First, Discovery Global must complete its spin-off from WBD, expected in Q3 2026. Then the Netflix acquisition requires shareholder approval from both companies. Finally, regulatory reviews in the United States, European Union, and other jurisdictions must conclude favorably.
Paramount could continue pursuing its hostile bid, appealing directly to WBD shareholders despite the board’s rejection. Hostile takeovers succeed when shareholders conclude that management isn’t acting in their best interests. So far, institutional investors seem content with the Netflix deal, but Paramount’s higher price tag could become more attractive if the regulatory process drags on or market conditions shift.
The broader media industry is watching closely. Disney, which recently explored potential combinations before stepping back, could find itself needing to respond if Netflix succeeds. Apple and Amazon, both building their streaming businesses, would face a far more formidable competitor. Traditional media companies that have resisted streaming consolidation might conclude they no longer have that luxury.
The Bottom Line
The fight for Warner Bros. Discovery represents more than a corporate bidding war. It’s a referendum on how consolidated the entertainment industry can become before regulators intervene. Netflix believes it can build something unprecedented: a company that both creates the dominant streaming platform and produces the content that fills it. Critics believe that combination would harm consumers, creators, and competitors alike.
The WBD board has made its preference clear, choosing Netflix over Paramount’s higher offer based on execution confidence and strategic fit. Shareholders will have their say. Regulators will determine whether the combination violates antitrust principles. And the entertainment industry will either gain a new dominant player or see its largest proposed merger blocked.
The transaction timeline stretches into late 2026 at minimum. Between now and then, expect continued lobbying from competitors, union opposition, and regulatory scrutiny that will define the boundaries of acceptable industry consolidation. Warner Bros. Discovery put itself on the market because its current structure wasn’t working. The question is whether the solution creates problems even larger than the ones it solves.
Sources: Netflix IR, CNBC, Deadline, CNN Business.
