Warner Bros has formally rejected Paramount’s $108 billion hostile bid.
MICHEL MARTIN, HOST:
There’s a new twist within the saga of the film and cable large Warner Brothers Discovery. Its board is unanimously urging shareholders to reject a $108 billion takeover bid from Paramount. As a substitute, the board is standing by an settlement struck with Netflix to amass its Hollywood studios and its streaming service HBO. NPR’s David Folkenflik has been masking the Warner Brothers sale, and he is with us now to inform us extra about this newest growth. David, good morning.
DAVID FOLKENFLIK, BYLINE: Good morning, Michel.
MARTIN: So what does Warner Brothers Discovery’s board say in explaining its choice?
FOLKENFLIK: Nicely, so that is a proposal from the Ellison household and Paramount that, as you say, would appear to worth this at $108 billion. Warner Brothers Discovery’s board was unanimous on this, they usually’re questioning whether or not that $108 billion is strong. The Ellisons took on and Paramount took on some huge cash from Center Jap funds to do that – many tens of billions of {dollars} – they usually’re questioning what they’re calling the Ellison household’s backstop. The Ellisons say, hey, look, we’re good for it. We’re placing in $40 billion. You already know, it is a part of our household belief, so you already know you could have it. And Warner Brothers is saying, we will not see into that belief, and it is also revocable, which implies the phrases of it are changeable. So we do not have perception into that belief. You guys are taking a ton of cash from Abu Dhabi, from the sovereign wealth fund of Qatar, from the Saudi Arabian sovereign wealth fund. It suggests to us that the financing is so much creakier. We all know Netflix is nice for this cash.
MARTIN: So let’s drill down a bit extra on the Ellisons right here. It was a – it is a hostile takeover bid – proper? – as a result of they’d already accepted the Netflix supply. So inform us a little bit bit extra about them, who their – and what their motivation was.
FOLKENFLIK: Yeah. They’ve made supply after supply after supply this yr. Larry Ellison is the co-founder of Oracle. He’s one among a handful of the wealthiest folks strolling the planet in the intervening time. His son, David, was the top of Skydance Media, nonetheless is, however along with his father’s financing was in a position to take over Paramount. Let’s, you already know, take into consideration what Paramount is. That is CBS. That is Paramount Footage. That is Paramount+ streaming. They wished to mix that with the Warner Brothers Discovery belongings. That’s Warner Brothers Studios, HBO, the – all of the Warner Brothers movie’s mental property catalog going again, but additionally all of their cable channels, notably CNN, which they wished to merge in some methods with the newsroom of CBS Information, Discovery, you already know, TBS, TNT and a complete bunch of others.
The Ellisons’ enjoying card is that they are near President Trump. And Trump has made clear that he intends to have a say in a number of company goings-on, however notably on this deal. He is taken a robust curiosity due to CNN. The Ellisons say, look, you already know, Larry Ellison has been a serious backer of the president. David Ellison has struck up an alliance as effectively. Privately, they’re saying, we’ll have the ability to get by antitrust issues a heck of so much faster than the oldsters over at Netflix. Both deal would contain a unprecedented consolidation of belongings.
MARTIN: And apparently, President Trump’s son-in-law, Jared Kushner, was to be one of many traders in Paramount’s bid, however he backed out yesterday.
FOLKENFLIK: Yeah, he did. You already know, one of many fascinating components of that is it seems to have been in anticipation of this announcement by Warner Brothers rejecting it. However Kushner’s involvement, the son-in-law of the sitting president who mentioned he’ll play a task in all this – that basically appeared to be a complicating issue for lots of people attempting to guage the bid by itself deserves. He additionally solely had a few hundred million {dollars} invested on this $108 billion deal, wasn’t a serious monetary backer in there.
MARTIN: OK. Very briefly, what occurs subsequent within the battle over Warner Brothers Discovery?
FOLKENFLIK: Nicely, in some unspecified time in the future, there ought to be a shareholders’ vote. In spite of everything, the board is attempting to make a suggestion. It is not clear precisely when that’ll occur. The Paramount bid is meant to lapse in early January. However let’s not neglect each Netflix and the Ellisons have a ton of cash. In the event that they need to, they certain may sweeten this deal. I think this is not the final chapter within the story of how this performs out.
MARTIN: That’s NPR media correspondent David Folkenflik. David, thanks.
FOLKENFLIK: You wager.
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