Perhaps in your childhood, or even on a random Friday afternoon, your plan has been, or continues to be, to get together to marathon movie classics like Harry Potter, The Lord of the Rings or the DC Comics stories. Maybe you’ve followed every season of Succession, commented on the twists of The White Lotus, or turned on the TV to watch CNN. If so, or even if you’ve only heard of those titles, what happened in Hollywood directly concerns you. Because all of those stories are at the center of one of the most intense and costly business battles in the entertainment industry.
After months of tensions, Netflix withdrew from the bid for Warner, paving the way for Paramount to close an operation for US$110 billion. With this move, a group is born that could exceed US$120 billion in combined value and today redefines what we see, how much we pay and who sets the destiny of the great film and television franchises.
To understand the magnitude of the movement you have to go back a few months. In December, Netflix had signed an agreement to acquire Warner’s film and television studios and its streaming business, including HBO Max, for about $83 billion. The offer was equivalent to US$27.75 per share and excluded part of the traditional cable television business, such as CNN and other signals that were not strategic for the streaming platform.
At that moment it seemed like a masterstroke. Netflix would add legendary franchises and a historic library of content to its catalog. The company already had more than 325 million subscribers and an annual investment of close to US$20,000 million in its own productions. With Warner, it would consolidate its position as the largest entertainment producer and distributor.
But Then Paramount appeared with a different proposal. Not only did he offer more money, US$31 per share, but he proposed taking the entire company, including the cable networks that Netflix did not want. The total value of the transaction climbed to more than US$110 billion.
Warner’s board of directors evaluated both proposals and declared Paramount’s superior. It gave Netflix a few days to match it. The response came within hours. “We have always been disciplined and, at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” said Netflix co-CEOs Ted Sarandos and Greg Peters. “This transaction was always a ‘good opportunity’ at the right price, not a ‘must have’ at any price,” they noted.
The market reaction was immediate. Netflix shares rose up to 13% after learning of the withdrawal. Investors interpreted that the company avoided taking on excessive debt and preserved its financial flexibility. Warner, on the other hand, saw its titles fall as the expectation of a bidding war that would further inflate the price dissipated. Paramount registered moderate movements, reflecting caution in the face of the challenge it now faces.
But What made Paramount’s offer so attractive? Beyond the price per share, the structure was decisive. The company promised $7 billion in compensation if the deal fails for regulatory reasons. a figure higher than that initially agreed with Netflix. It also agreed to pay US$2.8 billion to cover the penalty that Warner had to assume for breaking the previous pre-agreement. Besides, included a “ticking fee” of 25 cents per share for each quarter that the closing is delayed after September 2026, a direct incentive for shareholders.
The financial support was not less either. Paramount claimed to have US$57.5 billion in financing committed by large financial entities and with the key support of billionaire Larry Ellison, founder of Oracle, whose trust provided guarantees for more than US$45 billion in capital. Behind the strategy is his son, David Ellison, CEO of Paramount, who in less than a year went from leading a production company to heading one of the biggest corporate bets in recent Hollywood history.
Yesterday, Bruce Campbell, chief revenue and strategy officer at Warner Bros, said: “Netflix had the legal right to match Psky’s offer. As everyone knows, they ultimately decided against it. That led to the signing of an agreement with Psky this morning. So that is the current situation,” he added.
With the final signing, Paramount would not only retain its classic franchises such as Top Gun, Titanic or The Godfather. It would also add HBO, HBO Max, CNN, TNT, TBS and the universe of Harry Potter, Superman and dozens of award-winning productions. Two historic Hollywood studios would remain under one roof. However, the agreement is not without controversy. Lawmakers in Washington have already expressed concern about the impact on competition. Elizabeth Warren warned that the merger could result in “higher prices and fewer options.”
Mega agreement in the media raises alerts for possible job cuts
After this merger, Critics fear job cuts and greater homogenization of cultural offerings. The United States Department of Justice will review the operation under antitrust criteria, and authorities in Europe and the United Kingdom are expected to do the same. There is also a political component. Executives from both companies traveled to Washington to meet with legislators. The combination of news networks such as CNN and CBS under the same ownership raises questions about editorial independence.
