If Warner Bros. Discovery is leaning toward Netflix’s offer in the high stakes race for the company’s assets, rival bidder Paramount Skydance has a “Plan B” to win the auction, On The Money has learned.
Netflix has made a majority cash offer to purchase the Warner Bros. studio and HBO Max while Paramount Skydance has made an all-cash bid for the whole company including cable channels CNN and HBO, the sources said. WBD could pick a winning bidder as early as this week, people close to the process tell The Post.
A source close to WBD said the media giant believes this is now a “horse race” between Paramount Skydance and Netflix whose outcome is a “toss up,” giving it “50 50” odds.
Still, speculation is growing that WBD has come to prefer Netflix’s bid. Insiders note that Netflix CEO Ted Sarandos and WBD chief David Zaslav are said to be close. Netflix is also seen by the WBD board as a “better steward” of WBD’s assets as opposed to David and Larry Ellison, who are relative newcomers to major media, according to a source.
But if the board chooses Netflix, the Ellisons are developing a game plan that involves going over the head of the board and directly telling Warner’s shareholders, similar to a hostile bid for the company, according to people with direct knowledge of the matter. Their pitch: the Netflix deal is doomed to fail, facing rejection by President Trump’s antitrust cops at the Department of Justice and, if litigated, a loss in federal courts.
Likewise, the Ellisons will argue that theirs is the only deal that will glide through the regulatory process, and that shareholders will be paid immediately for the entire company. Even if Netflix pitches a majority cash bid of close to $30 a share as they suspect — a price well above the Ellisons’ current offer of around $25 — shareholders need to haircut the offer given the time value of money; during a legal process that could last more than two years, its assets will deteriorate as the fate of the company remains in limbo.
“Based on my conversations, the Ellisons aren’t going away quietly and are making contingency plans if they lose,” said one senior media executive who has had conversations with people at Paramount Skydance.
A spokeswoman for Paramount Skydance had no comment. A WBD rep also declined comment as did Netflix.
As The Post reported, senior White House officials recently met to discuss concerns about the Netflix combo. Combining two similar, so-called “horizontal” assets, Netflix’s No.1 streaming service with Warner’s No 3 service, HBO Max, almost always leads to an adverse outcome on antitrust grounds.
Also discussed: A Netflix-WBD combo would face serious opposition from European regulators, a government official at the confab said.
Paramount Skydance, meanwhile, will argue that its only overlap is the combining of Warner’s studio with Paramount’s, which given the proliferation of production venues, doesn’t meet monopoly status. Trump regulatory officials are less concerned about the antitrust implications of combining studios as Paramount Skydance is planning, as well as another bid by media giant Comcast, sources with direct knowledge of the matter say.
People familiar with the Ellisons’ thinking say they are also prepared to wait for the inevitable loss in court, swooping in at some later date with an offer that isn’t subject to a bidding war.
It’s unclear where Comcast, the media conglomerate headed by Brian Roberts, stands in the bidding. Like Netflix and Paramount Skydance, it has submitted a second round offer, though its balance sheet is such that it will have to borrow to keep pace with other suitors who are offering $25 or more for WBD, a deal price that could reach $70 billion.
Roberts also has a strained relationship with Trump who has made no secret of his disdain for him and Comcast’s MAGA-hating MSNBC subsidiary. Even bankers working for Comcast concede Roberts is the dark horse in the buyout drama.
A Comcast spokesman had no comment.
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