Exclusive | Paramount Skydance has a ‘plan B’ if Netflix wins public sale for Warner Bros. Discovery: sources

If Warner Bros. Discovery is leaning towards Netflix’s offer in the high stakes race for the company’s belongings, rival bidder Paramount Skydance has a “Plan B” to win the public sale, On The Money has discovered.

Netflix has made a majority cash offer to buy the Warner Bros. studio and HBO Max while Paramount Skydance has made an all-cash bid for the complete company including cable channels CNN and HBO, the sources said. WBD might decide a profitable bidder as early as this week, people close to the course of inform The Post. 

A source close to WBD said the media big believes this is now a “horse race” between Paramount Skydance and Netflix whose end result is a “toss up,” giving it “50 50” odds. 

Paramount Skydance CEO David Ellison (above) and father Larry are developing a game plan that entails going over the head of the WBD board and instantly telling shareholders, just like a hostile bid for the company. Evan Agostini/Invision/AP

Still, hypothesis is rising that WBD has come to choose Netflix’s bid. Insiders observe that Netflix CEO Ted Sarandos and WBD chief David Zaslav are said to be close. Netflix is also seen by the WBD board as a “better steward” of WBD’s belongings versus David and Larry Ellison, who’re relative newcomers to major media, according to a source.

But if the board chooses Netflix, the Ellisons are developing a game plan that entails going over the head of the board and instantly telling Warner’s shareholders, just like a hostile bid for the company, according to people with direct information of the matter. Their pitch: the Netflix deal is doomed to fail, facing rejection by President Trump’s antitrust cops at the Department of Justice and, if litigated, a loss in federal courts. 

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Likewise, the Ellisons will argue that theirs is the only deal that will glide by means of the regulatory course of, and that shareholders will likely be paid instantly for the whole company. Even if Netflix pitches a majority money bid of close to $30 a share as they think — a price properly above the Ellisons’ current offer of round $25 — shareholders need to haircut the offer given the time worth of money; during a legal course of that might last more than two years, its belongings will deteriorate as the destiny of the company stays in limbo. 

“Based on my conversations, the Ellisons aren’t going away quietly and are making contingency plans if they lose,” said one senior media government who has had conversations with people at Paramount Skydance.

Insiders observe that Netflix CEO Ted Sarandos (above) and WBD chief David Zaslav are said to be close. REUTERS

A spokeswoman for Paramount Skydance had no remark. A WBD rep also declined remark as did Netflix.

As The Post reported, senior White House officers not too long ago met to debate concerns about the Netflix combo. Combining two related, so-called “horizontal” belongings, Netflix’s No.1 streaming service with Warner’s No 3 service, HBO Max, nearly always results in an adversarial end result on antitrust grounds.

Also mentioned: A Netflix-WBD combo would face critical opposition from European regulators, a authorities official at the confab said.

A Netflix-WBD combo would face critical opposition from European regulators. WBD CEO David Zaslav, above. Getty Images

Paramount Skydance, meanwhile, will argue that its only overlap is the combining of Warner’s studio with Paramount’s, which given the proliferation of manufacturing venues, doesn’t meet monopoly standing. Trump regulatory officers are less involved about the antitrust implications of combining studios as Paramount Skydance is planning, in addition to another bid by media big Comcast, sources with direct information of the matter say.

People accustomed to the Ellisons’ pondering say they’re also ready to attend for the inevitable loss in courtroom, swooping in at some later date with an offer that isn’t subject to a bidding conflict. 

Paramount Skydance, meanwhile, will argue that its only overlap is the combining of Warner’s studio with Paramount’s, which given the proliferation of manufacturing venues, doesn’t meet monopoly standing. REUTERS

It’s unclear the place Comcast, the media conglomerate headed by Brian Roberts, stands in the bidding. Like Netflix and Paramount Skydance, it has submitted a second round offer, though its steadiness sheet is such that it should borrow to maintain tempo with other suitors who’re offering $25 or more for WBD, a deal price that might attain $70 billion.

Roberts also has a strained relationship with Trump who has made no secret of his disdain for him and Comcast’s MAGA-hating MSNBC subsidiary. Even bankers working for Comcast concede Roberts is the darkish horse in the buyout drama.

A Comcast spokesman had no remark.

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