Paramount Skydance CEO David Ellison speaks at the Bloomberg Screen Time Conference in Los Angeles on October 9, 2025.
Patrick T. Fallon | AFP | Getty Images
This is nothing like what David Ellison had planned for September.
Just a few months ago paramount skydance CEO sent a letter warner bros discovery The board argued it made sense to combine the two media and entertainment companies. This letter was the first of several letters offering increasingly higher prices for the company’s acquisitions, along with arguments about why it would be better to combine assets.
Due to Paramount’s interest, a formal sale process has begun. comcast and Netflix This ultimately doubled the value of Warner Bros. Discovery stock and resulted in Paramount losing the bidding war it initiated, at least for now.
On Friday, Netflix announced a deal to acquire HBO Max and the famed Warner Bros. movie studio for $27.75 per share, or a stock value of $72 billion. WBD plans to move forward with plans to spin off its pay-TV networks, including CNN and TNT Sports, before the deal closes.
Instead of supercharging Paramount just months after taking control of the company in a merger with Skydance, Ellison effectively handed over a rare jewel in the media and entertainment industry to its most powerful player, strengthening Netflix’s reach and stripping Paramount and Comcast-owned NBCUniversal from obvious merger targets.
“It wasn’t for sale before, and we wouldn’t have liquidated the assets or separated the assets in the way we do now,” Netflix co-CEO Ted Sarandos said on a Friday morning conference call announcing the deal. “I think it comes down to ‘why now?'”
Mr. Ellison revitalized a process that has resulted in significant benefits for Warner Bros. Discovery CEO David Zaslav, WBD’s management team, and shareholders.
Zaslav’s share
Equilar said Zaslav currently owns more than 4.2 million shares of Warner Bros. Discovery stock, with an additional 6.2 million shares slated to be transferred to him in the future through previously granted stock awards. Zaslav also has been granted approximately 20.9 million options with an exercise price of $10.16, the Equilar investigation found.
Based on Netflix and WBD’s trading price of $27.75 per share, this adds up to more than $554 million for the WBD CEO.
Factoring in an additional 4 million shares that Zaslav is expected to receive in January, the true total is closer to $660 million, said the people, who requested anonymity to discuss Zaslav’s holdings.
For shareholders, the sale process had similar benefits. Warner Bros. Discovery stock closed at $12.54 on September 10, the day before the Wall Street Journal reported that Paramount was preparing to make a bid for the company.
On Friday morning, Warner Bros. Discovery stock rose about 3% to more than $25 a share. This is more than double Warner Bros. Discovery’s unaffected sales process price and would return it to the 2022 level when WarnerMedia and Discovery first merged.
This is vindication for Mr. Zaslav, who has been under fire from Hollywood and investors for nearly four years for failing to serve shareholders. Friday’s announcement effectively took him from the brink of defeat to victory.
Still, Paramount is likely not done with its quest to acquire all of Warner Bros. Discovery.
Paramount hostilities
Mr. Ellison has been at the helm of Paramount Skydance and has wasted no time in transforming the company through deals and acquisitions.
Since the merger closed in August, Paramount has brought in executives and some of Hollywood’s biggest names, including the Duffer brothers. The company secured the rights to develop a live-action feature film based on Activision’s Call of Duty video game series and signed a $7.7 billion deal for UFC rights.
Mr. Ellison’s search for Warner Bros. Discovery is his biggest effort since taking control of the company.
Paramount’s lawyers sent a letter to Warner Bros. Discovery this week alleging the sale process was rigged in Netflix’s direction, a letter first reported by CNBC. Paramount accused Warner Bros. Discovery of not properly considering its $30, all-cash offer and selling it to Netflix as a preordained outcome.
Netflix made an initial bid of $27 per share for WBD’s studio and streaming assets, according to people familiar with the matter. This defeated Paramount’s offer at the time, and the trajectory of sales negotiations shifted toward Netflix, the person said. The person requested anonymity because the negotiations were private.
Paramount was the only bidder interested in acquiring all of WBD’s assets, including its movie studio, streaming services, and television network. The company has maintained that its offer is superior.
Paramount executives and advisers valued Discovery Global Network’s portfolio at nearly $2 a share, based on projected trading multiples and estimated leverage ratios, said the people, who requested anonymity because the discussions are private. Discovery Global includes CNN, TNT Sports, and Discovery channels.
Warner Bros. Discovery believes Discovery Global could be worth more than $3 a share if it trades well in the public market, according to people with direct knowledge of the matter.
Paramount also argues that acquiring the entire company would be more tax efficient for shareholders than buying just a portion of the company, and that the Netflix acquisition would involve greater regulatory risk. CNBC reported Friday that the Trump administration’s view of the proposed merger is one of “strong skepticism.”
Paramount has offered a $5 billion penalty if the proposed deal does not receive regulatory approval, the people said.
Netflix’s bid included a $5.8 billion breakup fee in case the deal did not receive regulatory approval, according to a filing with the Securities and Exchange Commission on Friday.
Paramount is currently evaluating its options as to whether to submit another improved bid directly to shareholders. It’s likely even higher than the all-cash offer of $30 per share it submitted to WBD this week.
That would give Netflix a chance to match that bid. The end result means even more money for WBD shareholders, and even more money for Zaslav.
—CNBC’s Nick Wells contributed to this report.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. With Comcast’s planned Versant spinoff, Versant will become CNBC’s new parent company.
