Netflix Challenges Paramount’s $108 Billion Warner Bros Discovery Bid, Citing Debt Risks
In a high-stakes battle for media consolidation, Netflix has publicly criticized Paramount Global’s $108 billion acquisition offer for Warner Bros Discovery (WBD), expressing significant concerns over the rival studio’s existing debt load. The streaming giant’s co-CEO, Greg Peters, told the Financial Times that Paramount’s proposal “doesn’t pass the sniff test,” highlighting that most WBD shareholders have not yet endorsed the bid. This public critique underscores a rising insecurity among stakeholders regarding the financial architecture of such a monumental deal.
Peters emphasized that Paramount is “already saddled with quite a lot of debt,” noting that its $30-per-share offer would require additional leverage he described as “pretty crazy.” He argued that without the personal financing of Oracle co-founder Larry Ellison—father of Paramount CEO David Ellison—Paramount would have “no chance in hell” of completing the transaction. The bid is structured with $55 billion in debt and $40 billion in equity backed by Ellison, a complexity Netflix contrasts with its own all-cash $82.7 billion offer, which it claims provides greater certainty and stability.
The competition highlights divergent corporate strategies. Netflix, with its strong balance sheet and over 325 million global subscribers, positions its bid as a straightforward, secure path to acquire Warner Bros’ storied film library and HBO’s catalog, including franchises like *Game of Thrones* and *Harry Potter*. Paramount, however, has secured only about 7% of WBD shares through its tender offer, far short of the required 50% for control, and analysts question the feasibility of increasing its offer given its leverage. This scenario is as strategically intense as a Champions League final, where every move is scrutinized.
In defense, Paramount supporters, like RedBird Capital founder Gerry Cardinale, have dismissed Netflix’s all-cash bid as “smoke and mirrors,” alleging it relies on transferring debt. The outcome of this contest will reshape Hollywood, potentially uniting Netflix originals with Warner classics and altering film release models. The situation is as impactful as USCIS changes immigration policy or the introduction of new tax laws, fundamentally altering the landscape. As the health minister denies false claims to ensure public trust, so too must these companies convince shareholders of their financial viability in a deal that will define the future of entertainment.
