Warner Bros. Discovery (WBD) did far more than simply turn down yet another overture from Paramount on Wednesday—it also provided the public with an unusually detailed glimpse into the inner workings of a fiercely contested bidding war that has captivated the media and investment communities alike. Through a newly filed disclosure, the company not only reaffirmed its rejection of Paramount’s proposal but also laid bare the reasoning, strategies, and competitive tensions that underpinned the entire negotiation process.
According to the filing, WBD’s board of directors urged shareholders to dismiss Paramount’s $30-per-share offer for the whole company, instead recommending continued support for Netflix’s alternative bid valued at $27.75 per share. Notably, that bid covered only WBD’s studios and streaming operations, yet the board emphasized that the Netflix proposal offered superior and more reliable value with fewer risks attached. The directors asserted that Paramount’s latest proposal was insufficient and burdened with significant potential liabilities and costs for investors, particularly when weighed against Netflix’s more stable and transparent terms. While a portion of the disclosed information had surfaced in prior reports, the document included a number of intriguing new insights that clarified key aspects of the months-long contest for control.
Below are six of the filing’s most noteworthy revelations, each shedding light on how this high-stakes corporate drama unfolded:
1. **David Ellison invoked family influence early in the process**
Immediately after WBD declined one of several confidential proposals in September, David Ellison personally reached out to David Zaslav, WBD’s chief executive officer, asking him to meet with Larry Ellison—the legendary Oracle cofounder and David’s father. The prevailing assumption among industry watchers was that the Ellison family’s enormous wealth would inevitably tip the scales in their favor. Yet, despite that perception, WBD ultimately expressed misgivings about the Ellison group’s reliance on a revocable trust whose assets could fluctuate, potentially altering its capacity to fund the proposed acquisition. That uncertainty introduced a financial vulnerability that WBD regarded as too substantial to ignore.
2. **Paramount employed aggressive tactics to win over Zaslav**
Paramount’s charm offensive was both ambitious and personal. As previously reported, Zaslav stood to earn more than half a billion dollars if a Paramount deal succeeded—most of it deriving from his shares that would immediately vest upon closing. The new filing quantified this figure with remarkable precision: $567,712,631. Furthermore, Paramount reportedly intimated that the Ellisons had suggested Zaslav might also receive an extraordinary additional compensation package worth several hundred million dollars if the merger went through. Zaslav informed his board that he rebuffed such overtures, declaring it would be inappropriate to entertain those discussions during the ongoing negotiations. Paramount also dangled the prospect of elevating him to co-CEO and co-chairman of the merged entity—an offer Netflix, for its part, never extended.
That revelation contradicts claims made in a previous letter from Paramount’s lawyers at Quinn Emanuel, who insinuated that the process had been biased toward Netflix, possibly due to WBD executives’ expectations of landing senior positions in the combined enterprise. Interestingly, Paramount’s own financial and legal advisers were unaware that the so-called December 3 Quinn Emanuel letter even existed. WBD’s filing quotes those advisers as admitting the correspondence was both counterproductive and erroneous, describing it as a “mistake” that impaired negotiations rather than strengthened them.
3. **Two different parties sought WBD’s ailing cable operations**
Perhaps one of the filing’s biggest surprises was the disclosure of a previously unreported bidder, referred to only as “Company C.” This entity proposed to acquire WBD’s cable television networks along with a 20% stake in its streaming and studio divisions, offering a sizeable $25 billion in cash. Various media outlets identified Company C as Starz, though that linkage has yet to be independently confirmed. Starz declined to comment, maintaining an ambiguous stance. Despite the hefty sum, WBD determined that Company C’s bid was “not actionable”—a corporate term indicating that it lacked sufficient binding terms or feasibility to proceed. After ruling it out, WBD focused its remaining attention on Netflix, Paramount, and “Company A,” which industry observers have unmistakably recognized as Comcast.
4. **Banks stood to earn handsomely regardless of the outcome**
While the fate of the media giants hung in the balance, Wall Street’s major advisory firms were poised for substantial rewards. The filing reveals that financial powerhouses including Allen & Co., J.P. Morgan, and Evercore together stood to collect approximately $225 million in total fees contingent on the successful completion of the sale—whether to Netflix or Paramount. This disclosure highlights not only the lucrative nature of investment banking in large-scale M&A but also a broader trend across media and telecom sectors. According to PricewaterhouseCoopers, overall merger and acquisition activity in these industries surged by 61% during the prior year (excluding the pending WBD transactions), and that momentum shows every sign of continuing, driven by investors’ insatiable demand for high-value intellectual property.
5. **Middle Eastern funding was contentious but not disqualifying**
The Ellison group’s plan included securing approximately $24 billion from Middle Eastern investors to bankroll their offer—a financing structure that raised eyebrows given the potential involvement of sovereign or state-linked funds, including sources in Saudi Arabia. Considering that WBD’s assets include CNN, a major news network, and that U.S. intelligence has previously tied the Saudi government to the 2018 killing of a Washington Post journalist, the prospect of foreign state investment introduced ethical and political sensitivities. Nevertheless, as Business Insider’s Peter Kafka observed, the issues WBD cited regarding the foreign capital were portrayed less as matters of national allegiance and more as technical financial obstacles. The company did not depict them as moral or patriotic dealbreakers, merely hurdles that would require additional due diligence.
6. **Regulatory scrutiny turned out to be a nonissue**
One of the most frequently debated questions surrounding the rival bids was which merger candidate—Netflix or Paramount—would face fewer antitrust or regulatory barriers. Both sides insisted they would easily withstand such scrutiny, while casting doubts upon their competitor’s odds. Paramount contended that a union between Netflix and WBD would produce an outsized and potentially anti-competitive entity, disadvantaging both consumers and creative talent within Hollywood. They argued that Netflix, already the world’s preeminent subscription streaming platform, would gain excessive leverage if it also controlled HBO and Warner Bros.’ vast entertainment library. Netflix, however, countered by claiming that a tie-up between Paramount and WBD would actually yield an even larger media conglomerate when measured by total U.S. television viewing time. In the end, WBD’s board determined that regulatory concerns were essentially a wash. The filing explicitly states that its advisers concluded there was no material difference in antitrust risk between the two competing proposals.
As an unexpected variable, the filing also alludes to the uncertain position of former U.S. President Donald Trump, known for his close connections to the Ellison family but who, as of now, has refrained from publicly endorsing either side. His influence remains an unpredictable factor hovering at the periphery of an already volatile situation.
Through this extended account, the WBD filing functions not just as a legal disclosure but as a fascinating chronicle of contemporary corporate gamesmanship. It provides a rare and comprehensive portrait of how towering egos, immense capital, and strategic risk intersect at the highest levels of the modern entertainment industry.
Sourse: https://www.businessinsider.com/takeaways-why-warner-bros-discovery-reject-paramount-bid-favor-netflix-2025-12
