The corporate battle for Warner Bros. Discovery It has become the biggest soap opera in the entertainment industry. Netflix and Paramount Skydance are battling for one of the most valuable catalogs in Hollywood history, with a key move by the Los Gatos-based platform: transforming its proposal into an all-cash offer to try and win over Warner's shareholders.
What's at stake goes far beyond a simple purchase: the operation can redefine the balance of power in the global streaming businessThis will have a direct impact on Europe and Spain, where HBO Max (and its future evolution) and Netflix compete head-to-head for users' attention. The outcome will determine how we watch movies and series in the coming years.
A Netflix all-cash offer to entice shareholders
Netflix has made a decisive move: all cash offerThe company will pay $27,75 per share of WBD, keeping the total value of the transaction around $82.700-83.000 billion, but eliminating the treasury stock component that was generating doubts in the market.
In the original proposal, Netflix proposed a mixed scheme$23,25 in cash and $4,50 in Netflix stock. This structure also included a safeguard: if Netflix's stock price fell below $97,91, Warner shareholders would receive more shares to compensate for the difference. With the sharp decline in the stock price in recent months, this mechanism had become a point of contention.
Netflix shares have fallen from levels close to $130 per share to around $87-88. losing around a fifth of its value since the deal was announcedThis setback fueled the perception of risk among WBD investors, who would now see that uncertainty reduced by receiving only cash.
According to the documentation submitted to the US regulator, The company will finance the purchase by combining available cash, lines of credit, and committed fundingpreserving, as Netflix itself insists, a "healthy" balance sheet and room for maneuver for future strategic decisions.
The boards of directors of Netflix and Warner Bros Discovery have unanimously approved this revised version of the agreement, which simplifies the operation and aims to accelerate the timeline towards the WBD shareholder vote, scheduled for April 2026 if there are no further delays.
What Netflix buys and what gets left out: the role of Discovery Global
The design of the transaction is key to understanding the pulse with Paramount. Netflix does not intend to acquire the entire Warner Bros Discovery conglomeratebut only with what he considers the heart of his strategy: the film and television studios and the streaming business, including the HBO Max platform and the HBO service.
The rest of the group, mainly Cable television and other traditional assets will be grouped into a new company called Discovery Globalwhich will be listed independently on the stock exchange. This entity will integrate channels such as CNN, TNT, and various Discovery channels, along with other more "traditional" media businesses undergoing a period of structural transition.
Warner Bros Discovery had already announced its plans to separate the studio and streaming business from the cable businessThis spin-off should be completed in approximately six to nine months. Only once this internal operation is finalized could the sale to Netflix be definitively completed, provided that competition authorities and shareholders give their approval.
In this scheme, WBD shareholders They will not only receive the $27,75 per share offered by NetflixThey will also retain their stake in the new Discovery Global. The market's valuation of this company will be one of the major financial debates in the coming months, with analysts estimating the cable business at between two and four dollars per share.
The numbers published by Warner indicate that, looking ahead to 2026, The television division could generate revenues of $17.000 billion and an adjusted EBITDA of around 5.400 billion. CNN alone, one of the most politically and media-sensitive assets, would generate around 1.800 billion in revenue and about 600 million in EBITDA, figures that fuel the debate about whether the cable still has strategic value.
Paramount Skydance: a higher offer for 100% of Warner
In contrast to this surgical structure of Netflix, Paramount Skydance has opted for an all-out offensiveThe company led by David Ellison is offering $30 per share of WBD and plans to buy the entire group, including cable channels and other assets that Netflix is leaving out.
In terms of valuation, Paramount's proposal amounts to approximately $108.000-108.400 billion, including debt.This is in contrast to Netflix's offer of $82.700 billion. On paper, the price per share is clearly higher, an argument the company has repeatedly emphasized in its public campaign to attract WBD shareholders.
To strengthen its financial credibility, Paramount Skydance has even included an irrevocable personal guarantee from Larry Ellison.Oracle co-founder and a major backer of the project. The offer also has the support of sovereign wealth funds such as Saudi PIF and investment vehicles from Abu Dhabi and Qatar, adding a geopolitical dimension to the competition.
Paramount maintains that Linear television channels have little or no asset valueBut at the same time, it assigns them an implicit valuation of between $3 and $5 per share within its overall proposal. This double standard has fueled skepticism from some market participants, although several major WBD investors, such as Pentwater Capital Management and Gabelli Funds, have publicly acknowledged that Paramount's offer seems more attractive to them.
Warner's board support and market doubts
Despite pressure from Paramount, The top management at Warner Bros Discovery has clearly aligned itself with Netflix's proposalThe board of directors has repeatedly reiterated its unanimous recommendation in favor of the agreement with the streaming platform, highlighting the "certainty of value" provided by the cash payment and the possibility for shareholders to continue participating in the future of Discovery Global.
David Zaslav, president and CEO of WBD, has emphasized that The merger with Netflix would bring together “two of the world’s largest storytelling companies”Meanwhile, the chairman of the board, Samuel A. Di Piazza Jr., has spoken of “incredible value” for investors thanks to the new cash structure.
Netflix, for its part, insists that its offer is “clearly superior” to Paramount’s, focusing on the fastest-growing assets and allowing shareholders to avoid full exposure to a traditional television business whose future is fraught with uncertainty. In a statement, Ted Sarandos has argued that the deal offers the best outcome for shareholders, creators, and the industry itself..
Not everyone shares this view. European analysts like Esther Gutiérrez de la Torre, from Bankinter, believe that Netflix's bid is not that attractive This is in comparison to the $30 per share that Paramount is offering for 100% of the group. From this perspective, the rival offer avoids the risk of being stuck with a stock of questionable appeal like the future Discovery Global, something that particularly worries institutional investors.
Bankinter also emphasizes that The operation would significantly increase Netflix's debt, to levels close to 3,5 times EBITDA.from current, much more conservative ratios. This additional leverage, coupled with the anticipated increase in content spending, has fueled a debate about whether the market is adequately assessing the financial risks of the acquisition.
Potential impact on global streaming and in Europe
Beyond the battle of numbers, the big question is how this integration would affect the entertainment landscape. The combination of Netflix's customer base combined with the Warner and HBO Max catalogs This would position the new group as the world's largest streaming service by market share, ahead of Disney+, Prime Video or Apple TV+, with a particularly significant presence in the United States and Europe.
Industry estimates suggest that The merger could give Netflix a share of over 30% in the global streaming marketThis level would inevitably raise alarm bells for competition regulators in both Washington and Brussels. US political figures, including Donald Trump and Democratic Senator Elizabeth Warren, have already expressed reservations about such a high degree of concentration.
In Europe, Some MEPs have warned of the risk that such a dominant resulting platform could reduce the diversity of content. and limit the negotiating power of independent producers, including Spanish ones. A giant combining Netflix and HBO would concentrate enormous power over the financing and distribution of European series and films.
For audiences in Spain, The operation could result in a catalog integration that would bring together HBO's big titles with Netflix originals. Under one roof: from Game of Thrones and The Last of Us to Money Heist, Elite, and recent local productions. At the same time, there could be adjustments to prices, packages, and release windows that are yet to be determined.
Industry unions and various creative associations fear that A consolidation of this size could lead to fewer projects, more standardization of formats, and ultimately, job losses.especially if the priority becomes short-term profitability over creative experimentation.
Hollywood, movie theaters and the Warner legacy
One of the most sensitive points of the discussion is what will happen to Warner's historic label and its relationship with movie theaters. Ted Sarandos has promised to maintain the 45-day theatrical release window. for new studio productions, in line with what Warner has been doing lately, as a gesture to calm the fears of exhibitors and filmmakers.
The deal would catapult Netflix to the top spot largest film producer on the planetinheriting a catalog that includes classics such as Casablanca, The Godfather, Singin' in the Rain or powerful contemporary sagas such as Harry Potter, The Lord of the Rings or the DC universe with Batman and Superman.
In the field of series, The merger would bring HBO's flagship titles under the Netflix umbrella. —The Sopranos, Game of Thrones, The West Wing, among others—, reinforcing its weight not only as a distribution platform, but as an essential archive of recent audiovisual culture.
From Hollywood, quite a few professionals have expressed concern about the idea that One of the great classic studios is being absorbed by a streaming platformThey fear that the way films are produced and released will be altered, and that the logic of the algorithm will prevail over that of creative risk, at a time when the industry is already suffering the consequences of the pandemic and the strikes by screenwriters and actors.
Sarandos, in recent interviews, has tried to distance himself from that view, stating that Netflix is not looking to cut production or reduce staffThis contrasts with the strategy he attributes to Paramount. According to the executive, "they need all those movies and all those series," a message aimed at both Warner employees and creators worried about their future.
Political and regulatory dimension of the pulse
The process does not take place in a vacuum. The fight for Warner has a strong political dimension in the United StatesWith actors like Donald Trump openly showing their interest in the fate of networks like CNN, one of the most critical voices regarding his figure.
Trump has even stated that I would prefer that Paramount take control of WBDThis position aligns with the close relationship between the former president and Larry Ellison. The idea of a “less hostile” CNN has been mentioned in various political accounts, adding a particularly delicate dimension to any decision regarding the sale.
Antitrust regulators, both in the US and potentially in the European Union, They will have to assess whether a merger of this size unacceptably limits competitionTrade groups and industry associations have warned of potential job losses and a reduced variety of cultural offerings if large business consolidations continue.
Netflix and Warner estimate that, since the initial agreement reached in December, It could take between 12 and 18 months to fully complete the mergerThis assumes that all required authorizations are obtained. It is possible that the authorities may impose conditions, divestments, or specific commitments regarding content and competitive neutrality.
Meanwhile, the Paramount's hostile takeover bid and its legal moves in Delaware could further extend the timelineEach appeal or extension of the takeover bid adds new layers of uncertainty to a process that is already, in itself, one of the most complex that the audiovisual industry has ever experienced.
How does all this affect Netflix as a company?
Alongside the bidding war, Netflix's stock market performance has clearly been affected by the transactionDespite having presented solid quarterly results, the market has reacted cautiously to the increase in debt and the magnitude of the outlay that integrating WBD would entail.
Analysis firms such as Bankinter have initiated coverage of Netflix with a buy recommendation and a Target price in the region of $109 per shareThis would imply a potential upside of nearly 30% from current levels. However, this positive outlook coexists with concerns about the impact of the Warner acquisition on the balance sheet.
Some analysts believe that If the deal ultimately falls through, the outcome could act as a short-term boost to the share price.The reason is twofold: on the one hand, Netflix would avoid increasing its debt to 3,5 times EBITDA; on the other, it could resume share buybacks, currently on hold pending the outcome of the takeover bid.
There is also a debate about whether The market is sufficiently discounting the regulatory and political risk associated with this integrationA blockade by the authorities, after months of negotiation and financial costs, would be an uncomfortable scenario for all parties involved, including European shareholders who are closely following the outcome.
Meanwhile, Netflix argues that its cash-generating capacity and leading position in streaming allow it to undertake a transaction of this scale without compromising its future, and that the combination with Warner This would strengthen its creative muscle and its global presence, including in markets like Spain..
The battle to acquire Warner Bros. Discovery has exposed all the latent tensions in the entertainment business: the clash between traditional models and streaming platforms, political pressure on major media outlets, the concentration of power in streaming, and doubts about how far consolidation can go without harming competition. Netflix's all-cash offer, backed by WBD's board but opposed by Paramount and part of the market, places shareholders at the heart of a decision that will not only shape the future of three major companies, but also how millions of viewers in Spain, Europe, and the rest of the world will access films and series in the coming decade.
