Warner Bros Rejects Revised Paramount Bid, Sticks With Netflix (reuters.com)
- Reference: 0180542393
- News link: https://news.slashdot.org/story/26/01/07/2121252/warner-bros-rejects-revised-paramount-bid-sticks-with-netflix
- Source link: https://www.reuters.com/legal/transactional/warner-bros-rejects-revised-paramount-bid-risky-leveraged-buyout-2026-01-07/
> Warner Bros Discovery's board unanimously [1]turned down Paramount Skydance's latest attempt to acquire the studio , saying its revised $108.4 billion hostile bid amounted to a risky leveraged buyout that investors should reject. In a letter to shareholders on Wednesday, Warner Bros' board said Paramount's offer hinges on "an extraordinary amount of debt financing" that heightens the risk of closing. It reaffirmed [2]its commitment to streaming giant Netflix's $82.7 billion deal for the film and television studio and other assets.
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> Their assessment comes even after Paramount, which has a market value of around $14 billion, proposed to use $40 billion in equity [3]personally guaranteed by Oracle billionaire co-founder Larry Ellison -- father of Paramount CEO David Ellison -- and $54 billion in debt to finance the deal. The decision keeps Warner Bros on track for its deal with Netflix, even after Paramount amended its bid on December 22 to address the earlier concerns about the lack of a personal guarantee from Larry Ellison.
Netflix co-CEOs Ted Sarandos and Greg Peters welcomed Warner Bros' decision on Wednesday, saying it recognizes the streaming giant's deal "as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry."
[1] https://www.reuters.com/legal/transactional/warner-bros-rejects-revised-paramount-bid-risky-leveraged-buyout-2026-01-07/
[2] https://entertainment.slashdot.org/story/25/12/05/1728256/netflix-to-buy-warner-bros-in-72-billion-cash-stock-deal
[3] https://news.slashdot.org/story/25/12/22/2138243/larry-ellison-pledges-40-billion-personal-guarantee-for-paramounts-warner-bros-bid
Why the debt is a problem (Score:4, Insightful)
Leveraged Buyouts used to be famous for being scams.
Say there is a company with good assets worth 100 million. But the stock is trading at 80 million. Someone (scumbags A) would collect ten million, get a LBO loan for 75 million, and buy the company for 85 million.
Once they have control of the company, the COMPANY (not scumbag a) get a hard asset loan for 90 million, funded on the 100 million in hard assets. But Scumbag A personally take 15 million out of the 90, getting their money back and a 50% profit. Their LBO bank gets their 75 million back (plus a small profit), so the only debt now is the 90 million to the hard asset company.
Scumbag A then sells the company, making even more money. Maybe they take it public, maybe they 'sell' via bonds backed by ownership. But the new owners still has the 90 million in debt.
The thing is, nobody has been working on the business. They have just been moving money around. So upper management that is clueless. Maybe they get lucky and the VP's trying to do the real business are good and make a profit.
But if they are not good, those VPs can bankrupt the company. Often someone decides to try and save the company by taking a big risk. Again, maybe it works out, but otherwise it accelerates the bankruptcy.
Leveraged buyouts have a horrible reputation - a way for schemers to make money while destroying a company.
So smart money looks at people 'buying' companies using softer assets like debt or stock with a lot of suspicion.
The real problem (Score:3)
> Why the debt is a problem
The real problem is the ORACLE (One Rich Asshole Called Larry Ellison).
The ole south park choice (Score:2)
A douche or a turd. Ellison is Randy Marshes second biggest turd.
So what happens to CNN (Score:2)
I don't subscribe to Netflix
Re: (Score:2)
Those channels aren't part of the deal. [1]Discovery Global, will house CNN and other cable channels. [cnn.com]
[1] https://www.cnn.com/2025/12/05/media/netflix-deal-warner-bros
More chances to complete the merger with Netflix (Score:2)
While Trump personally would prefer the Ellisons, and maybe USoA regulators will aquice, in the rest of the (relevant) Jurisdictions WBD + Netflix has more chances chances to pass than WBD + Paramount Skydance
I seriously doubt that Netflix or Paramount want to stop operating the combined company in the UK, Europe, Japan, Korea, China, or even Brazil. Which is what would happen if those foreign regulators said no, and a merger proceeded anyway with the blessing of uncle sam.
Think about it, the biggest overla
Re: (Score:2)
> While Trump personally would prefer the Ellisons, and maybe USoA regulators will aquice, in the rest of the (relevant) Jurisdictions WBD + Netflix has more chances chances to pass than WBD + Paramount Skydance
> Think about it, the biggest overlap between WBD+Netflix is in streaming, with a smallish overlap in games (WBDs gamin g division is small, netflix's is ultra tiny), TV and movie production (WBD is big, netflix is mid), and catalogue (WBD is hugeand spans decades, netflixis small, and spans 3 lustres tops). Meanwhile, Netflix has no OtA or cable channels.
> Meanwhile, paramunt has every-single-one of the things WBD has, and in comparable sizes... so, more overlap, bigger consolidation, less competition. The EU, UK, JP, BR and CR and CN, and more regulators around the planet will not like that one bit.
Except that's not what's being sold. Discovery Global, will house CNN and other cable channels. So the argument that Paramount already has a bunch of TV channels doesn't really amount to anything as the TV channels aren't part of the deal.
Therefore, frankly, the overlap of Netflix and HBO Max is what we're discussing here and that Venn diagram is a lot closer to a perfect circle whereas Paramount and HBO Max is more of a circle within a larger circle.
They're all dying (Score:2)
This is the sort of thing you see in a dying industry, pointless consolidation to delay the inevitable. It doesn't matter which of Netflix or Paramount bought Warner. They're both as creatively bankrupt as Warner and neither is capable of turning that ship around. This is certainly a better value for Warner shareholders though. Now Netflix can take their turn crapping all over the IPs that Warner already finished shitting on. Congratulations, I suppose.
Re: (Score:2)
> This is the sort of thing you see in a dying industry, pointless consolidation to delay the inevitable. It doesn't matter which of Netflix or Paramount bought Warner. They're both as creatively bankrupt as Warner and neither is capable of turning that ship around. This is certainly a better value for Warner shareholders though. Now Netflix can take their turn crapping all over the IPs that Warner already finished shitting on. Congratulations, I suppose.
Honestly, I give it less than ten years until Disney just outright owns all television, streaming, and film studios. Done and done. They seem to be the only true behemoth left outside of news networks, and even some of those have Disney hooks due to cross promotion already.