Warner Bros. Discovery
Warner Bros. Discovery, the entertainment company caught between Paramount's $30 and Netflix's $27.75 bids. Digital-News

David Ellison, the founder of Skydance Media, has launched a bid to buy Warner Bros. Discovery at $30 per share, attempting to take control from Netflix. Warner Bros.' board had already agreed to sell to the streaming giant for $27.75 per share, but Ellison decided to go directly to the company's shareholders, bypassing the board's approval. Shareholders now have until 8 January to cast their votes.

The outcome of this bid will determine who controls some of the most valuable entertainment properties, including Game of Thrones, DC films, Harry Potter, HBO, and Warner Bros. Studios. Netflix and Paramount are presenting shareholders with two radically different visions for the future of the company.

Netflix's Plan: Absorbing Warner Bros. and HBO

Netflix's offer values Warner Bros. at $27.75 per share, comprising $23.25 in cash and $4.50 in stock. If successful, the deal would give Netflix access to Warner Bros. Studio, HBO, and HBO Max, bringing together a vast library of iconic content.

Warner Bros.' catalogue includes Game of Thrones, the DC Universe, Harry Potter, Friends, and The Sopranos. Netflix aims to combine all of this with its own hits like Stranger Things and Squid Game, creating a single platform with decades of Warner Bros. content alongside Netflix originals.

However, there is a significant caveat. Before the deal closes, Discovery's news and sports channels—CNN and TNT Sports—would be spun off into a separate company. This means that the news and sports divisions would not be part of the merged entertainment business.

Netflix has promised to 'maintain Warner Bros. current operations and build on its strengths, including theatrical releases for films.' This indicates a desire to keep things largely as they are, rather than significantly expanding the company's activities.

Ellison's Counter: Higher Cash Bid and Ambitious Cinema Plans

Ellison's bid offers an extra $2.25 per share, entirely in cash, with no stock involved—simpler and more straightforward. But he's not just bidding higher; he's also promising to pursue 'plans for additional growth' at the box office, directly challenging Netflix's stance of maintaining current operations.

Ellison sent a memo to Paramount staff on the same day he launched his bid, describing the deal as 'doing more, not less' for creative talent and emphasising his aim to build a 'stronger Hollywood'. His vision includes merging Paramount+ with HBO Max and securing major sports rights, including the NFL, Olympics, UFC, and Champions League. The message is clear: this would create a genuine rival to Netflix rather than merely expanding its own streaming empire.

Another key difference is their approach to Warner Bros.' planned split. Warner Bros. had intended to spin off CNN and TNT Sports before any deal was made. Netflix is fine with this plan. Ellison, however, wants to acquire the entire company in one go.

This is where the hostility becomes evident. The Warner Bros. board has repeatedly rejected Ellison's bid, so he has gone directly to shareholders, effectively sidestepping the company's leadership.

Shareholders Decide by 8 January

Warner Bros.' board has already chosen to accept Netflix's offer and is unlikely to change its stance. Nonetheless, shareholders are not bound by the board's recommendation. They can opt to sell their shares directly to Paramount through a process called a tender offer, which allows them to bypass the board.

The deadline for shareholders to act is 8 January.

So, what is at stake? Two vastly different visions for Warner Bros. If Netflix's plan prevails, the company will continue to focus on maintaining current theatrical and streaming operations. If shareholders choose Ellison's bid, the company could pursue expansion, new content, and a more aggressive growth strategy, with the potential to reshape the landscape of Hollywood.

The outcome will determine who controls Warner Bros., HBO, and major franchises like Game of Thrones and the DC Universe. It will influence how these properties are developed, distributed, and ultimately where audiences will watch them in the years to come.

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