By Andy Serwer
For the best analysis of where things stand in the battle between Netflix and Paramount Skydance to take over Warner Bros. Discovery, it's best to consider what the baseball sage Yogi Berra once said: "It ain't over until it's over."
To bring you up to speed. WBD's board had accepted Netflix's offer of $27.75 per share (composed of $23.25 in cash and $4.50 in Netflix stock), worth $82.7 billion, for Warner's movie studio and its streaming business (which includes HBO) and rejected Paramount's all-cash tender offer to WBD's shareholders of $30 a share, or $108.4 billion, for the entire company.
The WBD board said Paramount's offer was lacking on a number of counts, especially the fact that Larry Ellison, chairman of Oracle, father of Paramount CEO David Ellison and sugar daddy of that company's bid, hadn't personally guaranteed the offer. This morning, voilà, Ellison the elder did just that, providing an irrevocable $40.4 billion personal guarantee, essentially throwing the ball back into WBD's court -- which is very much to be expected.
As Barry Diller noted to Barron's previously about this deal (and though it is not overtly designated as such), "it's going to be an auction," and is likely to drag on for months. WBD CEO David Zaslav, as he should as a fiduciary, is looking to get every dime possible for his shareholders -- and as he is so adept at doing, secure a rich payday for himself.
Consider that both bidders, Netflix and Paramount (backed by Larry Ellison), have the deepest of pockets. Netflix has already demonstrated its financial capacity when the company put together its bid through bridge loans, bank debt, cash and proposed new share issuance. Sweetening the pot by another ten billion dollars or so is well within its reach.
As for Ellison on the Paramount Skydance side, ditto. As noted, Oracle's Sept. 26 proxy indicates that Ellison had pledged 346 million shares of his Oracle stock (worth about $100 billion) "as collateral to...secure personal term loans only used to fund outside personal business ventures."
Still there will be a breaking point. Netflix has lost over 23% of its market cap, or over $100 billion, since word of its interest in WBD was reported in late October (while the overall market has been flat) -- reason enough, according to a party in the Paramount camp, for Netflix shareholders to demand its management to walk away from the deal. Paramount's stock is also down since word of its interest in WBD first surfaced in September, in its case some 26% (or $5 billion.) Oracle's stock is down sharply this fall too, but that's likely over its massive exposure to the AI business, which has come into question as of late. (Oracle's stock is still up 15% year to date.)
How does this play out? "It's the old thing which everybody does," says Diller. "If you've already agreed to put up $1, putting up another five cents, another six cents and another nine cents loses its reality. If you're in for $1 you're in for the increase until somebody gets exhausted." It will go on, Diller says, until one of the parties says, "'This is no longer economic, and I'm not making the next bid,' like in any auction."
Certain to win to some degree or another will be Zaslav and perhaps his shareholders. WBD stock is up from $12.50 to $28.50 since the dealmaking began in September, yet the stock still trails the market since the company was spun out from AT&T in April of 2022. As for Zaslav though, a WBD filing on Dec. 17 indicates he could be due a total, golden parachute payout of $576 million if he closes a deal, regardless of which entity takes over his company.
Wonder what Yogi would say about that.
Write to Andy Serwer at andy.serwer@barrons.com. Follow him on X and subscribe to his At Barron's podcast.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 22, 2025 13:23 ET (18:23 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments