As Netflix, Paramount battle over Warner Bros, what’s at stake?

Los Angeles – Who ends up with the assets of Warner Bros Discovery, the owner of one of Hollywood’s largest and most venerable film studios, is likely to impact the entertainment industry for decades to come.

On Dec 5, the company announced that Netflix, the world’s dominant streaming platform, had

agreed to purchase its streaming and studio assets

in a US$82.7 billion (S$106.7 billion) deal, including debt.

Three days later, Paramount Skydance launched a hostile takeover bid for all of Warner Bros. The offer values the company at US$108.4 billion in total. Either deal would require regulatory approval.

Why is Warner Bros up for grabs?

Streaming has changed the way movies and TV shows are distributed, putting pressure on legacy media companies by cutting into revenue from cable subscriptions and advertising as well as film ticket sales.

In June 2025, Warner Bros announced a plan to split into two businesses, one focused on cable TV, the other on streaming and studios. Its chief executive David Zaslav calculated he could get a hefty premium for the streaming and studio businesses once they were separated from the debt-laden cable networks, people familiar with the deal said.

Then, in the autumn, Paramount made three unsolicited offers for the entire company. Absorbing it would give Paramount the combined resources of two major studios – Paramount and Warner Bros – and two major streaming services – Paramount+ and Warner’s HBO Max. 

How do the Netflix and Paramount offers compare?

Netflix would buy just Warner Bros’ Hollywood studios and streaming business; Warner Bros’ cable TV networks, including CNN, TNT and the Discovery Channel, would be split off in advance of the merger.

Netflix is offering US$27.75 a share in cash plus stock.

Paramount is appealing directly to Warner Bros shareholders with an offering of US$30 a share for the whole of the company. The Warner Bros board advised shareholders to reject the bid, which expires on Jan 8. 

If Warner Bros accepts an offer other than Netflix’s, it would be required to pay Netflix US$2.8 billion, according to their agreement. That high break-up fee would be an additional cost for Paramount to consider as it continues to pursue the company. 

Netflix agreed to pay Warner Bros a US$5.8 billion break-up fee if their deal is not approved. 

What issues do the proposed sales raise?

The Netflix-Warner Bros deal has attracted criticism from both Republican and Democratic politicians in the United States on the grounds that it would create a behemoth with significant control over the streaming market. The transaction would merge two of the world’s largest streaming services and two of the biggest makers of films and TV shows.

US President Donald Trump said that the “big market share” of the combined entities “could be a problem”. Mr Trump said he would be personally involved in the transaction’s review. The President has longstanding ties to Oracle co-founder Larry Ellison, whose son David is Paramount’s CEO. 

Paramount has argued that its proposed merger is more likely to be approved because it does not have as many streaming customers as Netflix. But it would still face scrutiny from antitrust regulators concerned about market consolidation. US Senator Elizabeth Warren has warned that either deal could reduce consumers’ choices and drive up prices.

Movie theatre owners and fans have raised concerns about a Netflix-Warner Bros merger. In the past, Netflix put just a few films in theatres for limited runs, usually to qualify for industry awards such as the Oscars. It considers viewers at home its primary audience.

Cinema United, the trade association for theatre owners, called the Netflix deal “an unprecedented threat to the global exhibition business”.

Netflix is pledging to maintain Warner Bros’ current operations and “build on its strengths, including theatrical releases for films”. On a Dec 5 conference call with investors, Netflix co-CEO Ted Sarandos said the company will release about 30 films in theatre in 2025. His chief gripe with the standard industry release strategy is the time it takes films to move from cinemas to streaming. 

He said film releases “will evolve to be much more consumer friendly to be able to meet the audience where they are quicker”.

How would a deal impact jobs?

Hollywood unions have raised concerns that either deal would result in job losses in an industry that has already seen significant layoffs in recent years. 

Netflix is targeting US$2 billion to US$3 billion in cost savings and other synergies in the first few years after the transaction. Most of that would come from reductions in general and administrative expenses, specifically support functions of the businesses where there is overlap.

In its letter to shareholders, the Warner Bros board said that Paramount is targeting a total cost savings of US$9 billion from its earlier merger with Skydance and the proposed acquisition of Warner Bros, which the board argued would “make Hollywood weaker, not stronger”.

What would happen to HBO Max if the Netflix deal closes?

While not specifically saying so, Netflix executives suggested that they would continue to operate HBO Max as a separate service, much the way Walt Disney Co offers both Disney+ and Hulu. Services are typically bundled together at discounted prices.

Netflix co-CEO Greg Peters told analysts that there is a high overlap between Netflix and HBO Max subscribers, who he said generate a significant amount of revenue. He said that Netflix could offer different packages and pricing tiers, and sell HBO content more aggressively globally. 

What’s Warner Bros’ plan for its cable networks?

Warner Bros is continuing plans to spin off its cable-TV networks – including CNN, TNT and HGTV – into a new company, Discovery Global. The spin-off is expected in the third quarter of 2026. BLOOMBERG