Paramount Global escalated its pursuit of Warner Bros. Discovery on Monday with a revised bid, igniting a political firestorm as the fate of the media conglomerate hangs in the balance. The increased offer, building on an earlier $108 billion proposal, comes as Paramount leverages connections to the Trump administration in an attempt to overcome resistance from Netflix and secure a deal for CNN, HBO and Warner’s film and television studios.
Details of the enhanced bid remain undisclosed, but the move underscores the high stakes involved in the auction. According to a person familiar with the process, Paramount is attempting to convince regulators and Warner Bros. Discovery shareholders that a merger with Paramount is preferable to a takeover by Netflix. This effort is being spearheaded by David Ellison, son of Larry Ellison, who oversees the company.
The escalating battle has drawn in former President Donald Trump, who demanded Netflix “IMMEDIATELY” remove Susan Rice, a former Obama and Biden administration official and current Netflix board member, or “pay the consequences.” Trump, in a social media post on Saturday, labeled Rice a “deranged… political hack!” His intervention, following a previous assertion that he would remain uninvolved and defer to the Department of Justice, highlights the political complexities surrounding the deal.
The Department of Justice is currently investigating whether a Netflix acquisition, or Paramount’s alternative bid, would stifle competition. Trump’s public criticism of CNN and its hosts further complicates the situation, suggesting a personal stake in the outcome.
Netflix initially secured a deal to acquire Warner Bros. Discovery in December, prompting Paramount’s counteroffensive. Netflix co-Chief Executive Ted Sarandos downplayed the political dimension of the bidding war, stating in a BBC interview Monday, “This represents a business deal, it’s not a political deal.”
Paramount, however, has actively engaged in political maneuvering. The company hired Makan Delrahim, a former Trump administration official who previously led the Justice Department’s antitrust division, to lobby regulators and politicians. Senator Ted Cruz (R-Texas) recently visited Delrahim at Paramount’s Los Angeles studio, where he received a tour of the “NCIS Origins” soundstages, according to a source familiar with the visit.
In a strategic move, Paramount applied for Justice Department approval of its deal in December, even without a signed agreement with the Warner Bros. Discovery board or shareholder consent. This maneuver aimed to expedite the approval process should the Netflix deal falter. Paramount announced last week that the Justice Department had not raised any statutory objections to its proposed acquisition.
Warner Bros. Discovery shareholders are scheduled to vote on the proposed deals on March 20. Paramount faces a deadline late Monday to improve its financial offer in an attempt to sway the Warner Bros. Discovery board away from the Netflix deal. Paramount is seeking to acquire all of Warner Bros. Discovery, including CNN, while Netflix has expressed less interest in the company’s cable channels and has offered $27.75 per share, with the right to match any improved Paramount proposal.
Warner Bros. Discovery is also planning to spin off its cable channel portfolio, including HGTV, TBS, and Cartoon Network, into a separate entity called Discovery Global, with shareholders receiving stock in the new company.
Regulators at the Department of Justice have reportedly sent inquiries to all three companies, examining Netflix’s historical practice of prioritizing streaming releases over theatrical distribution and investigating potential leverage exerted over content creators. Republican lawmakers also grilled Sarandos during a Senate Judiciary Subcommittee hearing earlier this month, questioning the potential impact of the merger on competition and raising concerns about Netflix’s content. Senator Josh Hawley (R-Mo.) accused Netflix of promoting a “transgender ideology” to children, a claim Sarandos denied.
David Ellison declined to testify at the February 3 hearing, prompting criticism from Senator Cory Booker (D-N.J.) and other lawmakers, who accused Ellison of evading questions about his dealings with the president. Booker, Senate Minority Leader Chuck Schumer, and others sent a letter to Ellison requesting that he preserve records related to the proposed transaction. The Justice Department’s antitrust chief, Gail Slater, was reportedly removed from her position after raising concerns about the deal, according to reports. Her former deputy publicly warned that antitrust decisions were being influenced by corporate lobbyists.
“This deal was never going to be decided on the merits of the offer or rigid antitrust considerations,” said Gabriel Kahn, a professor at the USC Annenberg School for Communication and Journalism. “This was a classic Trump administration deal where proximity to the president counts a lot more than financial terms.”
