Netflix dropped its bid for Warner Bros. Paramount offered more cash. Senators worry about Trump’s influence.
Netflix decided to walk away because the bidding war became too expensive. Warner Bros. Discovery (WBD) officially named Paramount’s latest bid a “superior proposal”. Paramount increased its offer to $31 per share in cash, while Netflix’s offer stayed at $27.75 per share. Netflix executives, Ted Sarandos and Greg Peters, explained that they must remain “disciplined” with their money. They stated that at the new higher price, the deal was “no longer financially attractive”.
An advisor for Netflix mentioned that bidding against a billionaire like Larry Ellison was becoming “irrational”. Netflix viewed the acquisition as a “nice to have” but not a “must have” at any cost. By refusing to raise their bid, Netflix chose to protect its own financial health rather than winning the battle at a price that did not make economic sense.
The Ellison family and President Trump
The Ellison family, who leads Paramount Skydance, has very strong ties to President Trump. Larry Ellison is a close ally and a major supporter of the President. Recently, Larry Ellison moved his primary home to Florida, which is only a 20-minute drive from Trump’s Mar-a-Lago estate. They have worked together on major projects, such as the Stargate AI initiative and the TikTok U.S. deal.
David Ellison, the CEO of Paramount, has also been very active in the White House. He has had private meetings with President Trump to discuss the takeover of Warner Bros. Eight Democratic senators are now demanding answers about these relationships. They are worried about “political interference” because Paramount seems very confident that the government will approve their deal despite competition concerns. Senators are asking if David Ellison ever offered to change CNN’s news coverage in exchange for the President’s help with the merger.
Regulations and blocking the deal
Senators and state officials believe this merger could be blocked if it violates antitrust laws or competition regulations. Even though Paramount says the deal does not raise competition concerns, Senators argue that it actually raises “significant competition concerns”. The Department of Justice (DOJ) and the California Attorney General, Rob Bonta, are both investigating the deal. Bonta has stated that the merger is “not a done deal” and that his office will be vigorous in its review.
There are also fears that the merger review process is being tainted by political favoritism. Senators have ordered Paramount to preserve all records of their talks with Trump, his family, and White House officials. They want to ensure that no secret “side deals” were made, such as promises of political advertising or specific news content decisions at CBS or CNN. If regulators find that the deal creates a monopoly or was helped by illegal political influence, they have the power to sue to stop it.
Skyrocketing stock prices
When Netflix announced it was dropping out of the bidding, its stock price jumped by more than 10%. Investors were happy because they preferred Netflix to be financially careful rather than spending too much money on Warner Bros. At the same time, Warner Bros. shareholders are excited because the Paramount deal offers them more cash per share ($31 instead of $27.75).
While it might seem like the companies were just trying to lift their stock prices, the sources describe this as a “process of price-discovery”. This means the companies were trying to find the true market value of the studio. Activist investors called the Paramount win a “win-win for shareholders” because it provides a clear path to government approval and a higher payout. However, the high price is what eventually made the deal “irrational” for Netflix to continue.
Impact on film industry workers
A merger of this size often causes major problems for the people who work in the industry. Many in Hollywood expect “cuts to staff” and layoffs. When companies merge, they often eliminate “redundant” jobs to save money. We have already seen this happen at CBS News, where there were leadership shakeups and layoffs after the Ellisons took control. Workers in Los Angeles are already facing production cuts, and this merger could make things worse.
There is also a concern about the future of cinema and news. Critics worry that if a streaming giant like Netflix had won, it might have hurt the traditional movie theater business. On the other hand, the deal with Paramount makes people nervous about political influence over news brands like CNN. For the average worker, the mood is described as a “gut punch” because they face job uncertainty while the top executives and shareholders celebrate with “champagne toasts”.
Money and connection can do anything, no? It can even start a monopoly. Like Underwood from House of Cards used to say, “I’ve always said that power is more important than money, but when it comes to elections, money gives power… well, a run for its money”.