How Paramount Won the Battle for Warner Bros against all Odds

For months, it looked as though David Ellison, the CEO of Paramount Skydance, was chasing a deal that simply wasn’t his to win.

Netflix had the cleaner offer to acquire Warner Bros. Discovery. As a matter of fact, Warner Bros. had already chosen Netflix. On the other hand, Paramount Skydance was the smaller and more heavily leveraged bidder. It faced questions about whether it could finance a takeover of one of Hollywood’s biggest media companies.

As you may know, Warner Bros. Discovery control HBO, Warner Bros. Pictures, CNN, the DC film franchise and a sprawling collection of television networks and content assets. Netflix, meanwhile, had the balance sheet, the global subscriber base and the credibility of a company that had already transformed itself from a streaming upstart into one of the world’s most powerful entertainment businesses.

Paramount appeared to be the underdog. Yet on September 21, after a bruising legal battle with 12 US states and the Writers Guild of America, Paramount reached a settlement that removed the last major obstacle standing between it and Warner Bros. Discovery.

The settlement marked the latest chapter in one of the most extraordinary takeover battles Hollywood has seen in decades. And the road to this point began with Paramount repeatedly being told no.

The first Move

The audacity of Ellison’s plan became clear in September 2025, barely a month after his Skydance Media completed its merger with Paramount. Rather than settle into running the newly enlarged Paramount, Ellison turned his attention to an even bigger prize: Warner Bros. Discovery.

The attraction was obvious; Paramount had Paramount Pictures, CBS, Paramount+, MTV and other valuable assets, but it remained a relatively small player compared with the giants reshaping entertainment. Warner Bros. Discovery offered something Paramount desperately needed: scale.

Ellison initially approached Warner privately. The company was already considering a breakup of its sprawling empire, and the prospect of acquiring Warner’s prized studio and streaming assets immediately attracted interest from several potential buyers.

Paramount was not alone, because Netflix soon entered the contest. Comcast was also interested. What followed became an auction for one of the world’s most valuable collections of entertainment assets.

By December, Netflix appeared to have won after Warner Bros. Discovery agreed to sell its Warner Bros. studios and HBO Max streaming business to the streaming giant in a transaction valued at about $72 billion. Warner’s cable networks were expected to be spun off into a separate company.

Paramount Refused to Disappear

For Ellison, that should have been the end. But it wasn’t. Instead of walking away, Paramount escalated by launching a hostile $108.4 billion offer for Warner Bros. Discovery. As a matter of fact, it took its proposal directly to shareholders after Warner’s board rejected its advances.

The move changed the character of the contest. This was no longer a conventional auction in which the target company quietly selected its preferred buyer. Ellison was now trying to overturn Warner’s agreement with Netflix by appealing directly to shareholders and arguing that Paramount’s offer was better.

But Warner’s board had a fundamental concern: could Paramount actually close the transaction?

Netflix had a reputation for financial strength and a comparatively straightforward transaction. Paramount, by contrast, was proposing a massive leveraged acquisition that would put enormous demands on its balance sheet.

Warner rejected the offer. That might have killed the bid for a less determined buyer. But Ellison instead went looking for more firepower.

Enter Larry Ellison

The most consequential weapon in Paramount’s arsenal was not another corporate adviser or another Hollywood executive. It was David Ellison’s father.

Larry Ellison, the Oracle co-founder and one of the world’s richest people, personally backed his son’s campaign, eventually pledging tens of billions of dollars in equity support. Bloomberg reported that the elder Ellison committed $40.4 billion in equity financing behind Paramount’s hostile bid.

That commitment tackled one of Warner’s biggest objections head-on. Paramount was no longer simply saying that it wanted Warner. The Ellison family was saying it could pay for it.

The financing structure continued to evolve. Paramount increased its debt commitments, offered shareholders additional incentives and accepted substantial financial consequences if the deal failed to close. It was an exceptionally expensive way to pursue a company that had already told Paramount it preferred someone else.

Netflix versus Paramount

Netflix had secured the original agreement with Warner, but Paramount’s campaign made it increasingly difficult for the streaming giant to sit comfortably.

The two companies represented very different visions for Warner. Netflix wanted just the Warner Bros. studios and HBO Max businesses, fitting them neatly into its global streaming machine.

Paramount, on the other hand, wanted everything. Its proposal ultimately encompassed Warner’s entire portfolio, including its cable networks. That meant HBO, Warner Bros. Pictures, CNN, TNT, Food Network and other assets would sit alongside Paramount Pictures, CBS and Paramount+.

The strategic logic was enormous. But so was the financial risk. For months, the two sides pushed and pulled over price, financing and deal certainty. Paramount raised its offer. Netflix had opportunities to respond. Paramount raised the pressure again.

By February 2026, Paramount was offering $31 per share, putting the value of the transaction at roughly $81 billion before considering debt and other obligations. Netflix ultimately decided not to match the offer. And that was the decisive moment.

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