Imagine waking up to the news that the quiet, behind-the-scenes negotiations you’d been following for months just exploded into open warfare. That’s exactly what happened this morning in Hollywood and on Wall Street when David Ellison’s newly merged Paramount Skydance decided they’d had enough of playing nice.
After losing what many considered the prize assets of Warner Bros Discovery to Netflix in a $72 billion deal announced just days ago, the Ellison team did something few saw coming. They went straight to WBD shareholders with an all-cash, $30-per-share hostile takeover bid. No more boardroom talks. No more polite offers. Just a direct appeal to the owners: take our money and let us fix this company.
It’s the kind of move you usually see in 1980s corporate raid movies, not in 2025 media deals. But here we are.
The Hostile Bid That Changes Everything
Let’s be clear about what’s happening here. This isn’t just another media merger story. This is a full-scale hostile takeover attempt that’s already sending shockwaves through the entertainment industry and raising serious questions about the future of traditional media companies.
The offer values the entirety of Warner Bros Discovery at roughly what the market currently thinks it’s worth, but with one crucial difference: it’s all cash. No stock swaps, no complicated merger arbitrage. Just cold, hard cash backed by some of the deepest pockets in private equity and banking.
And the timing couldn’t be more dramatic.
How We Got Here: The Bidding War That Wasn’t Supposed to End This Way
For months, the smart money had been on some kind of combination between Paramount and Warner Bros Discovery. The logic was straightforward: combine two companies with massive content libraries, overlapping streaming services, and struggling linear TV networks to create something that could actually compete with Netflix and Disney.
David Ellison, backed by his father’s billions and RedBird Capital’s Gerry Cardinale, had been working this angle hard. They closed the Paramount deal earlier this year and immediately turned their attention to WBD as the perfect complement. The combined company would have had everything: the Paramount film studio, CBS, the Warner film library, HBO’s prestige content, Discovery’s reality empire, and major sports rights through TNT.
It made so much sense on paper that many analysts considered it the most logical outcome of media consolidation.
Then Netflix dropped their bomb.
Netflix’s Cherry-Picking Strategy
The Netflix deal that was announced Friday isn’t for all of Warner Bros Discovery. It’s specifically for the studio and streaming assets – essentially the parts everyone actually wants. The Warner film library, HBO Max (which would presumably be folded into Netflix), the DC universe, Harry Potter, and all the prestige television that made HBO the gold standard.
What Netflix explicitly doesn’t want? The cable networks. CNN, TNT Sports, Discovery Channel, Food Network – all the linear TV assets that are bleeding subscribers and advertising revenue in the streaming era.
In one stroke, Netflix gets to strengthen its position as the dominant streaming platform while leaving WBD’s shareholders holding what increasingly looks like yesterday’s business.
This is the ultimate cherry-picking move. Netflix gets the crown jewels and leaves the declining assets for someone else to deal with.
And that’s exactly why Paramount Skydance is making their move now.
The All-Cash Premium That Shareholders Can’t Ignore
The $30 per share offer represents something that Wall Street rarely sees anymore: a meaningful premium in cash for a large-cap media stock. While the exact premium depends on which day’s closing price you use, it’s substantial enough that institutional investors are already doing the math.
More importantly, it’s cash. Not some complicated stock consideration that depends on the acquirer’s stock price holding up. Not promises of future synergies. Just money in the bank.
For shareholders who’ve watched WBD’s stock get crushed since the merger with Discovery – down more than 70% from its peak – this offer must look pretty tempting.
- No exposure to integration risk
- No waiting for regulatory approval that might never come
- No dealing with the declining cable bundle
- Just take the money and move on to the next investment
It’s hard to overstate how powerful this argument is in today’s market environment.
The Regulatory Chess Game
Here’s where things get really interesting. The Netflix deal for WBD’s studio and streaming assets faces significant antitrust hurdles. Combining the two largest streaming platforms raises obvious market share concerns, and there are already reports that regulators are viewing the transaction with considerable skepticism.
Paramount Skydance, on the other hand, is making the case that their deal – taking the entire company including the cable networks – actually preserves competition in a way that the Netflix carve-out doesn’t. They’re smaller than Netflix, they don’t have the same streaming market share, and crucially, they’re reportedly emphasizing their positive relationship with the current administration.
Whether this argument holds water remains to be seen, but it’s a clever positioning that turns what might have been a regulatory disadvantage into a potential advantage.
What This Means for the Future of Media
Regardless of how this specific deal plays out, we’re witnessing something historic. The traditional media bundle is being torn apart in real time, and the winners and losers are being decided right now.
The Netflix strategy – buying only the valuable content assets and leaving the declining distribution businesses behind – could become the template for how Big Tech continues to consolidate Hollywood. Why buy the whole cow when you can just get the milk?
But Paramount Skydance is betting that there’s still value in owning the entire ecosystem, particularly if you can extract costs and create a more efficient competitor to the streaming giants.
Perhaps the most fascinating aspect of this drama is watching David Ellison – a 42-year-old who’s spent his life in his father’s shadow – attempt to build something that could eventually rival the tech giants his father has spent decades battling.
This isn’t just about corporate strategy. It’s about legacy, ambition, and the fundamental transformation of how we consume entertainment.
The next few weeks will be crucial. Will WBD shareholders take the bird in hand? Will regulators block Netflix’s asset grab? Can Ellison pull off what would be one of the most dramatic hostile takeovers in media history?
One thing is certain: the old rules of media mergers no longer apply. We’re in uncharted territory, and the outcome will shape the entertainment landscape for decades to come.
In a town built on stories, this might be the best one Hollywood has produced in years. And unlike most Hollywood stories, we already know how this one ends: with someone writing a very large check.
The only question is who gets to cash it.
