Trump’s influence casts a significant presence over Paramount’s victory against Warner Bros

Paramount Triumphs Over Netflix in Warner Bros Takeover Battle

Last year, Larry Ellison—described by Donald Trump as a close associate—addressed reporters at the White House as the former president looked on.

Netflix’s Bid Falls Short

When Netflix CEO Ted Sarandos traveled from Los Angeles to Washington D.C. on Thursday, he was likely preparing to make a strong case for his company’s acquisition of one of Hollywood’s most iconic studios. However, his efforts proved unnecessary. While Sarandos was meeting with Trump administration officials, Warner Bros announced it viewed a competing $111 billion bid from Paramount as the superior offer.

With Paramount’s last-minute move, Netflix withdrew from the race, setting the stage for a dramatic conclusion to a months-long saga that has captivated the entertainment industry.

For Paramount, under the control of Oracle founder Larry Ellison, this marks the most significant milestone yet in an aggressive campaign to dominate American media. Yet, Ellison’s relationship with Trump continues to cast a long shadow over the proceedings.

The contest for Warner Bros has been as gripping as any Hollywood blockbuster.

Paramount’s Strategic Moves

Skydance, led by Larry Ellison’s son David, completed an $8 billion acquisition of Paramount last summer, quickly shifting focus to its ultimate goal: Warner Bros.

Paramount, which operates networks like Comedy Central and Channel 5, as well as the Paramount+ streaming platform, initiated the process by making an all-cash bid for Warner Bros in September. This prompted Warner Bros CEO David Zaslav to consider selling the company.

By December, Warner Bros—home to franchises such as Harry Potter and Batman, and the HBO Max streaming service—had agreed to an $83 billion takeover by Netflix.

Paramount, however, remained undeterred. The company launched an intense lobbying effort, emphasizing the strengths of its proposal to lawmakers and regulators, and raising doubts about the Netflix deal. Paramount even threatened a proxy battle for control of Warner Bros’ board.

Despite repeated rejections, Paramount’s persistence eventually paid off.

Final Offer and Netflix’s Withdrawal

This month, Warner Bros gave Paramount one week to present its best and final offer. Paramount responded by raising its bid to $31 per share, agreeing to a “ticking fee” of $0.25 per share each quarter the deal remains pending, a $7 billion termination fee if regulators block the transaction, and a $2.8 billion break fee payable to Netflix.

On Thursday evening, Warner Bros’ board endorsed Paramount’s $111 billion proposal. Netflix was given four business days to match the offer but chose not to proceed. Co-CEOs Sarandos and Greg Peters stated the acquisition was no longer financially viable, describing it as a “nice to have” rather than essential at any cost.

Political Influence Looms Large

Beyond the enormous sums involved, political considerations have played a significant role. While Trump has no official involvement in the deal, his influence over regulatory bodies is undeniable.

Netflix had long acknowledged the regulatory hurdles it faced, cautioning investors that approval could take up to 18 months.

The Trump administration’s Department of Justice had already begun reviewing the proposed merger, citing concerns that combining Netflix and HBO Max would stifle competition in the streaming market.

Netflix also encountered strong opposition from theater owners and prominent filmmakers like James Cameron, who worried the company would limit theatrical releases. Netflix consistently denied these claims.

Paramount’s Political Advantage

In contrast, Paramount has downplayed regulatory risks, even though its acquisition would reduce the number of major Hollywood studios from five to four.

Ellison’s ties to Trump have drawn attention as the billionaire expands his influence in the media sector. Paramount has already acquired The Free Press, an online outlet founded by outspoken journalist Bari Weiss, appointing her as head of CBS—a move that has sparked accusations of a rightward shift. Ellison also played a central role in the group that purchased TikTok’s U.S. assets. Trump has publicly referred to Ellison as a “good friend.”

The news division will be pivotal in the merger. Unlike Netflix’s offer, Paramount is seeking to acquire all of Warner Bros Discovery, including its traditional TV networks. This would give Ellison control over CNN and CBS.

Mark Thompson, former BBC director-general and current head of CNN, urged staff not to make assumptions following Paramount’s victory.

Even before the news component was in play, Trump had criticized the Netflix deal, suggesting the combined company’s market share could pose problems.

Tensions escalated recently when Susan Rice, a former Obama adviser and Netflix board member, warned that Democrats would retaliate against companies that “take a knee” to Trump. In response, Trump demanded Netflix remove Rice or face consequences.

Regulatory and Economic Uncertainties

Throughout these developments, Sarandos sought to minimize Trump’s role, telling the BBC that the transaction was strictly business, not political, though he acknowledged Trump’s penchant for social media commentary.

Forrester analyst Mike Proulx noted that politics have heavily favored Paramount from the outset, and even if Netflix had persisted, regulatory approval was unlikely in the current climate.

Deal Not Yet Finalized

Although Paramount is now poised to acquire Warner Bros, the process is not complete. California Attorney General Rob Bonta announced a thorough review, emphasizing that the deal is not yet finalized.

The merger’s impact on Hollywood’s economy is a major concern. Paramount has pledged to cut $6 billion in costs, raising fears of significant job losses. Sarandos warned that even deeper cuts may follow as Paramount seeks to manage the debt incurred by the acquisition.

Senator Elizabeth Warren, who has called for an investigation into Trump’s involvement in Ellison’s Paramount takeover, labeled the Warner Bros deal an “antitrust disaster.” She argued that a small group of Trump-aligned billionaires is attempting to control media content and pricing, and urged the public and state attorneys general to ensure the law is enforced amid concerns about corruption in the Justice Department.

There are also worries about the substantial Gulf investment backing Paramount’s bid. Sarandos recently criticized foreign state ownership of media companies as problematic.

David Ellison may have to address these issues if summoned to testify at a Senate antitrust hearing next week.

Market Reaction and Future Prospects

Netflix’s decision to withdraw from the contentious and politically sensitive deal was well received by investors, with shares rising nearly 9% in after-hours trading.

For now, Warner Bros CEO David Zaslav stands to gain the most, potentially earning hundreds of millions from the sale. Warner Bros Discovery, which itself was created through a $43 billion merger in 2022, has struggled with declining share prices due to debt and challenges in its traditional TV business. Zaslav praised the Paramount deal as a tremendous opportunity for shareholders and expressed eagerness to collaborate with the new owners.

The Ellison family is likely celebrating a major victory in their ambitious expansion across the U.S. media landscape. However, with the unpredictable influence of the White House, the Warner Bros story may still have more surprises in store.