Paramount set for $111bn Warner Bros takeover after Netflix drops bid; paramount clears path

Netflix has backed away from its proposal to buy Warner Bros Discovery, clearing the way for Paramount Skydance to win a months-long takeover fight in a deal valued at around $111bn (£82. 2bn). The move puts paramount in position to acquire an iconic studio and its networks, but major regulatory and staff concerns remain.

Netflix withdrawal and Paramount's superior bid

Warner Bros, which put itself up for sale last year, said on Thursday that Paramount's latest offer was "superior" to the one from Netflix, and Netflix declined to raise its bid. Paramount Skydance's position follows months of competition over one of Hollywood's most storied studios; the buyer would gain control of the studio together with its films and media networks, a package that advisers say could significantly reshape the media landscape.

How the bids evolved and Netflix executives' statements

Last December, Warner Bros reached a deal with Netflix for some assets in a transaction worth roughly $82bn (£61bn) including debt. Paramount then made a rival proposal that was initially rebuffed, but an increased offer was lodged earlier this week that was boosted by $1 per share. Netflix co-chief executives Ted Sarandos and Greg Peters said the company had declined to match Paramount's bid because "the deal is no longer financially attractive" at that price. The Netflix executives added that "The transaction we negotiated would have created shareholder value with a clear path to regulatory approval, " and that "This transaction was always a 'nice to have' at the right price, not a 'must have' at any price. " The announcement followed a visit by Ted Sarandos to the White House on Thursday.

Regulatory hurdles and statements from California officials

Despite Paramount's lead, the transaction is far from certain. Paramount would need approval from the US Department of Justice as well as European regulators. California Attorney General Rob Bonta said later on Thursday that the potential merger "is not a done deal, " noting that the California Department of Justice has an open investigation and that his office intends to be vigorous in its review; he posted that stance on social media. Bonta had also said earlier this month that his office would review any deal involving Warner Bros because the entertainment industry represents a "critical sector" for California's economy.

Fears among CBS News and staff about newsroom futures

The decision by Netflix to walk away has left workers at CBS News and alarmed about the possibility of the two top-tier news operations coming under a single roof. With Paramount Skydance emerging as the winning bidder, and with the deal still requiring approval of Warner Bros Discovery shareholders and government regulators, employees fear the merging of the newsrooms and the potential for significant job cuts.

Some employees expressed nervousness about Paramount's Trump-friendly ownership and leadership enacting ideologically driven programming changes at the network, and particular concern centered on the prospect of CBS News editor-in-chief Bari Weiss taking a significant role. Weiss is described as a conservative commentator turned media entrepreneur with no previous television industry experience, and her tenure at CBS has been called uneven since she was appointed editor-in-chief last October. Her path to the job was said to have been paved by concessions that David Ellison and his Skydance Media made to gain the support of Trump-picked regulators to acquire Paramount.

One producer, not authorized to comment, warned that "A Paramount WBD merger is a disaster for the people who work at both companies, and if Bari Weiss takes control of, it will be the end of the global network Ted Turner founded, " adding "I don't think that's hyperbolic. " A second staffer took a more measured line, saying "because is so big and makes so much money, it was always going to attract the Ellisons. " Multiple CBS News staffers who were not authorized to speak resorted to curse words on reading the news: "Fuck, fuck, fuck, " said one producer; "Well, fuck, " said another. A third CBS News staffer said they expected their department to be cut if the network is merged with and duplicative services are eliminated, as often happens in media mergers.

Assets at stake, executive reactions and cultural concerns

Paramount's victory would add not only but also Warner's HBO network to its portfolio. HBO is home to hit shows such as Succession and Game of Thrones and is known for award-winning documentaries. Seth Stern, chief of advocacy at the Freedom of the Press Foundation, warned that David Ellison "will readily throw the first amendment, ’s reporters and HBO’s film-makers under the bus if they stand in the way of expanding his corporate empire and fattening his pockets, " and argued that selling companies that depend on the first amendment to a "censorial White House puppet" would be both morally wrong and harmful to shareholders' interests.

Warner Bros Discovery chief executive David Zaslav took a brighter tone, saying that the merger "will create tremendous value for our shareholders. " WBD is scheduled to hold a global town hall for employees late on Friday morning. In a Thursday evening memo to employees, chief executive Mark Thompson urged staff not to jump to conclusions about what the acquisition would mean for the network. Paramount itself is backed by tech billionaire Larry Ellison and led by his son David Ellison, as it seeks to transform into a Hollywood heavyweight.