The streaming wars just went next level

Netflix offered $82 billion to buy Warner Bros. Discovery, then Paramount came in swinging with a $108.4 billion all cash bid that includes everything, streaming, film studios, and even cable networks like CNN, TNT, and TBS.

Warner had already struck a preliminary deal with Netflix, but Paramount’s offer adds over $25 billion more value. Now, Warner’s board has to decide which deal makes more sense for shareholders.

If Paramount wins, Netflix might still get a chance to match or top the bid, but walking away could cost Warner a breakup fee.

It’s officially a Hollywood showdown. Who do you think will come out on top, Netflix or Paramount?

paramount has mounted a hostile $108 billion takeover bid for Warner Bros Discovery, directly challenging Netflix’s $83 billion agreement we covered last week. The $30-per-share counter-offer bypasses Warner Bros Discovery’s board and targets shareholders directly, positioning Paramount’s complete acquisition against Netflix’s streaming-focused partial deal that excludes CNN and other cable channels.

The Monday morning announcement escalates what was already Hollywood’s most consequential bidding war in decades. Paramount Skydance characterizes its offer as “superior” precisely because it would acquire all Warner Bros Discovery assets rather than just the streaming and studio operations Netflix wants. The distinction matters enormously for both regulatory review and theatrical exhibition futures.

Paramount’s financing includes backing from Middle Eastern sovereign wealth funds, positioning the company as preserving more traditional Hollywood infrastructure against Netflix’s streaming-first model. We’ll break down what this means for filmmakers, theatrical distribution, and the future of content creation.

What Paramount’s offer includes

Paramount’s $30-per-share cash offer values Warner Bros Discovery at approximately $108 billion including debt. That represents a significant premium over Netflix’s $27.75-per-share proposal. The key distinction lies in scope.

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Netflix’s agreement covers Warner Bros studio operations and HBO Max streaming service. Paramount has structured its bid to acquire the entire company, including the portfolio of cable channels that Netflix explicitly excluded. That means Paramount would gain control of CNN, along with other cable properties that represent declining but still revenue-generating assets.

This distinction matters for both regulatory review and strategic positioning. Paramount frames its offer as preserving more of Warner Bros Discovery’s existing operations rather than carving out only the streaming-aligned businesses.

Warner Bros Discovery stock closed at $26 per share on Friday following the Netflix announcement. It rose nearly 5 percent on Monday morning after Paramount disclosed its hostile bid, reaching $27.30 per share. The market movement suggests shareholders see value in Paramount’s higher offer, though regulatory approval remains uncertain for either transaction.

Regulatory scrutiny ahead

Both transactions face extensive antitrust review from U.S. Department of Justice regulators and international authorities. The numbers tell the story: Netflix already dominates global streaming with over 300 million subscribers across 190 countries, representing approximately 40 percent of the worldwide subscription streaming market.

Adding HBO Max eliminates a major competitive streaming platform while concentrating enormous content libraries under single ownership. Regulators will scrutinize whether that consolidation harms competition and consumer choice.

How regulators might view the deal

Paramount has structured its challenge around regulatory feasibility, arguing that Netflix’s dominant streaming position creates antitrust obstacles. During Monday’s conference call, David Ellison criticized Netflix’s likely defense that regulators should consider streaming within the broader entertainment landscape.

Ellison compared the argument to suggesting “Coke and Pepsi can merge because Budweiser is a replacement.” He’s framing streaming as a specific market where Netflix already commands approximately 40 percent global share.

Netflix will counter that competition spans multiple platforms including YouTube, TikTok, Amazon Prime Video, Apple TV Plus, and traditional broadcast television. That makes the relevant market far larger than subscription streaming alone. Meta successfully deployed similar market definition arguments in recent litigation, providing precedent.

Warner Bros Discovery structured protective provisions recognizing regulatory risk. If the deal fails due to regulatory rejection, Netflix owes Warner Bros Discovery a $5.8 billion termination fee. If Warner Bros Discovery accepts a competing bid instead, the company owes Netflix a smaller $2.8 billion breakup fee.

Why theatrical exhibition hangs in the balance

The bidding war carries significant consequences for theatrical cinema, as we explored in our previous coverage of Netflix’s acquisition announcement. Netflix co-CEO Ted Sarandos has repeatedly stated that “driving folks to a theater is just not our business.” That streaming-first philosophy views theatrical windows as obstacles to subscriber satisfaction rather than revenue opportunities.

Paramount has positioned itself as the theatrical champion. David Ellison promised the combined studio would release more than 30 theatrical titles annually if the acquisition succeeds. That’s a massive commitment compared to Paramount’s current eight annual theatrical releases, which the company plans to grow to 15 by 2026, 17 by 2027, and 18 by 2028.

During Monday’s conference call, Ellison stated the offer would “create a stronger Hollywood” serving “the best interests of the creative community, consumers and the movie theater industry.” We’re hearing similar commitments from Paramount executives in private conversations.

Netflix’s Ted Sarandos has attempted to assuage theatrical concerns during recent Wall Street calls. He’s stating “we’re deeply committed to releasing those movies exactly the way they would release those movies today” and noting Netflix has released approximately 30 films into theaters this year. However, those 30 releases were mostly limited awards-qualifying runs, not genuine wide releases.

Sarandos’ statements evolved significantly from Friday to Monday. Friday’s suggestion that theatrical windows would “evolve to be much more consumer friendly” became Monday’s stronger commitment language. We interpret this shift as defensive positioning against Paramount’s competitive pressure and regulatory scrutiny.
There’s lots on the table for all involved companies. Illustration by CineD

The box office math doesn’t add up

Warner Bros Discovery currently leads all Hollywood studios with $1.85 billion in domestic ticket sales this year and over $4 billion worldwide in 2025. The studio released eight consecutive box office hits including A Minecraft Movie, Sinners, and Weapons. That’s the kind of consistent theatrical performance the industry depends on.

Under Netflix ownership, longer theatrical windows would delay when films become available to Netflix subscribers. That creates strategic conflicts between theatrical revenue and streaming economics. Reports suggest Netflix plans a 17-day theatrical window for Warner Bros films. That means titles would play for only three weekends before streaming availability.

The 17-day window would leave substantial box office revenue uncollected. Let’s look at the numbers. Warner Bros’ Sinners earned 65 percent of its total through its first three weekends, that’s $240 million of $367.8 million final gross. The Batman from 2022 collected approximately 77 percent in that timeframe, $598.1 million of $772.2 million total.

Theater operators argue these truncated windows would force closures by eliminating the long-tail revenue that sustains operations. Mid-budget releases that build audiences over multiple weeks rather than opening at peak performance get hit particularly hard.

How we got here

The hostile takeover attempt culminates weeks of increasingly aggressive overtures from Paramount. Just before Netflix announced its agreement, Paramount sent a letter to Warner Bros Discovery CEO David Zaslav alleging the company ran a “myopic” sale process that “favors a single bidder.”

Warner Bros Discovery responded that it “fully and robustly” complied with shareholder obligations during a weekslong process that also drew interest from Comcast. Paramount indicated Monday that it considers the $30-per-share hostile bid not its “best and final” offer, suggesting room for further escalation.

Hostile takeover bids remain relatively uncommon at the top of the media industry. The Warner Bros Discovery situation differs in that two major bidders are competing openly, each with substantial financial backing and distinct strategic visions for the assets.

Industry pushback intensifies

The Directors Guild of America announced it would meet with Netflix to discuss “significant concerns” about the acquisition. The guild emphasized that “a vibrant, competitive industry, one that fosters creativity and encourages genuine competition for talent, is essential to safeguarding the careers and creative rights of directors and their teams.” Translation: filmmakers are worried about losing theatrical exhibition opportunities.
The Directors Guild of America has significant concerns about the acquisition. Image credit: DGA
Exhibition trade group Cinema United issued an even blunter statement. President and CEO Michael O’Leary declared the deal “an unprecedented threat to the global exhibition business.” O’Leary warned that “this mega-deal between Netflix and Warner Bros would risk removing 25 percent of the annual domestic box office if films that are traditionally given a robust theatrical release by Warner Bros disappear from theatres.”

The organization called Netflix’s theatrical commitments “inherently time-limited, transactional and defensive,” aimed at deflecting regulatory scrutiny rather than representing genuine commitment. We’ve heard similar sentiments from theater operators in private conversations.

Hollywood creative talent including James Cameron and Jane Fonda have reportedly characterized a Netflix-Warner Bros marriage as “a disaster for theatrical films,” according to Paramount executives. Congressional leaders have warned that consolidation could “diminish incentives to produce new content and major theatrical releases.”

Netflix’s recent theatrical track record supports industry skepticism. The company’s Rian Johnson threequel Wake Up Dead Man: A Knives Out Mystery failed to book the top three theater chains due to lack of a 30-day window. It grossed only $4 million-plus over the five-day Thanksgiving frame despite strong audience scores. The contrast with the franchise’s previous chapter, which had major chain support, demonstrates how Netflix’s window policies directly impact box office performance.
Netflix’s recent track record of putting its productions in theaters before wide release on their platform hasn’t been great – most lately with the box office results of a well-rated new feature in Rian Johnson’s murder mystery series. Image credit: Netflix

What happens next

Warner Bros Discovery’s board must decide within 10 business days whether to engage with Paramount’s hostile offer. The board faces a complex decision balancing Paramount’s higher cash offer against Netflix’s streaming synergies and regulatory positioning.

Both transactions require extensive regulatory review. For filmmakers and content creators, the outcome determines whether Warner Bros Discovery’s production infrastructure continues serving theatrical exhibition or pivots entirely toward streaming-first distribution. That affects how films are financed, marketed, and creatively developed.