Paramount Skydance Prepares “Plan B” as Netflix Emerges as Front-Runner for Warner Bros. Discovery

In a high-stakes auction, Skydance readies a shareholder-focused strategy to counter Netflix’s cash-heavy bid and potential antitrust hurdles

Paramount Skydance is reportedly preparing a contingency strategy as Netflix appears to gain momentum in the high-stakes auction for Warner Bros. Discovery (WBD), according to sources familiar with the matter. With the media giant evaluating competing offers, Paramount Skydance’s “Plan B” aims to appeal directly to shareholders should the board lean toward Netflix, potentially circumventing traditional approval channels.

Netflix has tabled a majority cash offer to acquire the Warner Bros. studio and HBO Max, while Paramount Skydance has proposed an all-cash acquisition for the entire company, including cable assets such as CNN and HBO. Sources indicate WBD’s board views the race as a near “50-50” contest, leaving the outcome uncertain. Netflix CEO Ted Sarandos’ close relationship with WBD Chief David Zaslav has reportedly bolstered the streaming giant’s standing, with the board reportedly seeing Netflix as a “better steward” for the company’s assets compared to the Ellison family, relative newcomers to large-scale media operations.

Should the board select Netflix, Paramount Skydance is prepared to take a direct approach with shareholders, framing its argument around potential regulatory pitfalls for the Netflix deal. The Ellisons’ strategy suggests that the Department of Justice may block or litigate a Netflix acquisition due to antitrust concerns. They also emphasize that their bid would allow immediate full payment to shareholders, whereas a Netflix transaction, even at a higher per-share price, could face protracted legal delays potentially diminishing the assets’ value.

“Based on my conversations, the Ellisons aren’t going away quietly and are making contingency plans if they lose,” said a senior media executive familiar with the discussions.

Paramount Skydance argues that its acquisition plan, which primarily merges Warner’s studio with Paramount’s, presents minimal antitrust risk. In contrast, a Netflix-WBD combination could face significant opposition in both the U.S. and Europe due to horizontal consolidation between two major streaming services. Sources indicate Trump-era regulators may view studio consolidation as less concerning than combining streaming platforms with overlapping subscriber bases.

Insiders also reveal that Paramount Skydance could wait for legal challenges to Netflix’s bid to unfold, allowing the company to swoop in later with a refined offer, avoiding the direct competition of a bidding war.

Other bidders, including Comcast, have submitted secondary proposals, though the conglomerate may need to borrow to remain competitive with offers exceeding $25 per share. The total valuation of WBD could reach $70 billion, making this auction one of the most closely watched and potentially transformative in the media landscape.

With regulatory scrutiny and shareholder interests hanging in the balance, the Paramount Skydance and Netflix rivalry illustrates the high-stakes intersection of media, streaming, and global antitrust considerations.