Paramount Makes Hostile WBD Bid, Predicts Easier Regulatory Road Than Netflix Deal

Paramount said its offer is more lucrative for WBD shareholders, and the Netflix deal exposes them "to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome." Paramount CEO David Ellison also said its proposal gives "a more certain and quicker path to completion," while Netflix's means "a challenging regulatory approval process."

"The prospect of getting to play kingmaker in the deal also seems to be delighting President Trump," TVRev analyst Alan Wolk wrote Monday. He pointed to Trump's comments that he would be "involved in the decision" and that a Netflix deal could be problematic because the streaming service has a large market share even without WBD's streaming assets.

Trump weighing in publicly in favor of Paramount could provide ammunition for Netflix against any government challenge of its deal, New Street's Blair Levin wrote investors. Netflix “could argue that he did so for political or personal reasons rather than antitrust reasons." The company could then conduct depositions and discovery that could result in "all kinds of delays and other potential collateral damage to the government case.”

Trump could also decide to delay getting involved to prolong his leverage over the three companies, Levin wrote. Paramount and its CBS News, WBD and its CNN, and Netflix "all are seeking his favor." Any deal to purchase WBD also requires European Union approval, and Trump weighing in could motivate the EU to take a dim view of the proposal, Levin wrote. “The more Trump weighs in, and the more it looks like it is driven by partisan and personal incentives, the more likely that the EU takes the view that gray areas in the analysis should be weighed in favor of whoever Trump opposed.”

WBD said it will "carefully review and consider Paramount Skydance's offer in accordance with the terms of Warner Bros. Discovery's agreement" with Netflix. Its board will advise shareholders of its recommendation about the Paramount offer within 10 business days, the company added.

Mergers and acquisitions consultant Andrea Miguelez wrote that the bids are different: Netflix's offer is for core streaming and studio assets but excludes cable networks, while Paramount's hostile offer also encompasses the cable portfolio.

Sen. Elizabeth Warren, D-Mass., said a Paramount/WBD “merger would be a five-alarm antitrust fire and exactly what our anti-monopoly laws are written to prevent.” The “hostile bid is backed by a who’s who of Trump’s buddies … raising serious questions about influence-peddling, political favoritism, and national security risks,” she said. DOJ “and the Committee on Foreign Investment in the United States must review any Warner Bros. deal based on the law and facts, not who sucked up the most to” Trump. Several lawmakers voiced major concerns about the Netflix deal last week, but Warren was the only one who had commented on the new proposal as of Monday afternoon.

Senate Antitrust Subcommittee Chairman Mike Lee, R-Utah, warned Friday night that there are many “antitrust red flags” in the Netflix/WBD deal and predicted that a “hearing is almost certain” on those issues. He was mum as of Monday afternoon about Paramount's proposal as an alternative.

In an SEC filing, Paramount said financing for its WBD bid is coming in part from sovereign wealth funds in Saudi Arabia, Qatar and the United Arab Emirates and from Affinity Partners, an investment firm headed by Trump's son-in-law Jared Kushner.

A Paramount win would mean the Ellison family "would control more influence over American media, culture and information than any entity in modern history," Miguelez said. Given Saudi Arabia's proposed investment, the deal would raise significant national security, power consolidation and cultural influence risks regulators need to look at, she said.

Asked about the Netflix/WBD deal on Saturday, Trump heaped praise on Netflix co-CEO Ted Sarandos but also expressed concern about the size of the proposed company. “That’s the question. They have a very big market share, and when they have Warner Bros., that share goes up a lot,” Trump said. “I’ll be involved in that decision, too.”

FCC Chairman Brendan Carr reportedly attended a meeting with Trump and Paramount executives about a possible offer for WBD before the current agreement with Netflix was announced, according to a Semafor article Monday. The article reported that Carr stated in the meeting that the FCC wouldn't have authority over a Paramount/Netflix deal, which is in line with his public comments on the matter (see 2512050046).

On social media Monday, Trump railed against a 60 Minutes interview with outgoing U.S. Rep. Marjorie Taylor Greene, R-Ga., calling correspondent Lesley Stahl "washed up" and "Trump hating." His main complaint was that Paramount Skydance "would allow a shot like this to air," he wrote. "THEY ARE NO BETTER THAN THE OLD OWNERSHIP, who just paid me millions of Dollars for FAKE REPORTING about your favorite President, ME! Since they bought it, 60 Minutes has actually gotten WORSE!"