Why Paramount’s bid for Warner Bros. could tank in favour of Netflix

Warner Bros. is reportedly moving in favour of doing business with Netflix, leaving Paramount in the dust.

According to Deadline, “Warner Bros. Discovery looks set to reject Paramount’s amended hostile takeover bid” next week, with the concern about a delay “that could dog its planned cable spinoff if a deal falls through” being one of the reasons.

The studio has already agreed to a broader deal with Netflix, which would allow the streaming giant to purchase Warner’s streaming properties as well as its cinematic catalogue in a regulated deal set to divide the various domains, “as it packages the rest into a standalone publicly traded linear television company called Discovery Global by the third quarter of next year.”

Breaking down the current deal

Despite the Ellison family-led Paramount’s insistence that their company has “the easier path” to buy Warner Bros. Discovery, their plans to obtain all of its assets would stall the kind of separatist deal which the studio has agreed on with Netflix — one which WBD prefers.

On the other hand, Reuters has reported, “Warner Bros’ board previously urged shareholders to reject Paramount’s $108.4 billion bid for the entire company, including its cable television assets, citing concerns over financing certainty and the absence of a full guarantee from the Ellison family.”

The Paramount problem

David Ellison, currently leading Paramount, has ironically fallen prey to his biggest hope for acquiring WBD — President Donald Trump.

Paramount previously promised to introduce amends to Warner properties once it its purchase of the company goes through.

Trump previously expressed a desire to have WBD lose its ownership of CNN, saying that “the people that have run CNN for the last, long period of time are a disgrace.”

Ellison subsequently vowed to “overhaul the network” according to Trump’s demands, per The Independent, while The Guardian reported that his father, Chief technology officer of Oracle Larry Ellison, called White House to engage “a dialogue about possibly axing some of the CNN hosts whom Donald Trump is said to loathe, including Erin Burnett and Brianna Keilar.”

However, according to Deadline’s latest report, Trump “recently fumed at CBS about a 60 Minutes interview with Marjorie Taylor Greene, calling Ellison-owned Paramount ‘no better than the old ownership.’”

Marjorie Taylor Greene recently had a fallout with Trump’s administration, subsequently stepping down as the Congress representative for the state of Georgia.

Comparing the offers

Netflix has offered WBD $82.7 billion, significantly less than Paramount’s $108.4 billion bid.

However, according to Reuters, the studio in question finds the streamer’s proposal more fruitful because it “offers a clearer financing structure and fewer execution risks.”

Also of note is the fact that at this point, the terms of agreement with Netflix would result in Warner Bros. facing “a $2.8 billion breakup fee if it walks away” from a deal with them.

While Donald Trump has confirmed that he will closely monitor the acquisition process regardless of the way it goes.