Paramount Skydance CEO David Ellison speaks during the Bloomberg Screentime conference in Los Angeles on October 9, 2025.
Patricio T. Fallon | afp | fake images
This is not exactly what David Ellison had planned back in September.
Just a few months ago, the supreme skydance The CEO sent a letter to Warner Bros. Discovery board argued that a combination of the two media and entertainment companies made sense. That letter was the first of several offering increasingly higher prices to acquire the company along with arguments for why the assets were better together.
Paramount's interest prompted a formal sales process: bringing Comcast and netflix into the mix, which ultimately doubled the value of Warner Bros. Discovery's stock and culminated, at least for the moment, in Paramount's loss in the bidding war that began.
On Friday, Netflix announced a deal to acquire HBO Max and famed film studio Warner Bros. for $27.75 per share, or an equity value of $72 billion. WBD will move forward with a plan to separate its pay-TV networks, such as CNN and TNT Sports, before the deal closes.
Instead of boosting Paramount, just months after gaining control of the company through a merger with Skydance, Ellison effectively handed a prized gem of the media and entertainment industry to its most dominant player, strengthening Netflix's reach and stripping Paramount and Comcast's NBCUniversal of an obvious merger target.
“It wasn't for sale before, and they certainly hadn't cleaned up the assets and separated them like they do now,” Netflix co-CEO Ted Sarandos said on a conference call Friday morning after announcing the deal. “I think that refers to 'why now'.”
Ellison drove a process that has made a lot of money for Warner Bros. Discovery CEO David Zaslav, WBD's executive team and its shareholders.
zaslav's part
Zaslav currently owns more than 4.2 million shares of Warner Bros. Discovery, and another 6.2 million shares would be awarded to him in the future through previously granted stock awards, according to Equilar. Zaslav also has a grant of nearly 20.9 million options with a strike price of $10.16, Equilar found.
Based on the Netflix-WBD transaction price of $27.75 per share, that all adds up to more than $554 million for the WBD CEO.
Taking into account another 4 million shares that Zaslav will receive in January, according to a person close to the situation who asked not to be identified discussing the executive's holdings, the actual total is closer to $660 million.
For shareholders, the sale process has brought a similar windfall. Shares of Warner Bros. Discovery closed at $12.54 on Sept. 10, the day before The Wall Street Journal reported that Paramount was preparing a bid for the company.
On Friday morning, shares of Warner Bros. Discovery rose nearly 3% to more than $25 each. That's more than double the price of Warner Bros. Discovery's unaffected sales process and a return to 2022 levels when WarnerMedia and Discovery first merged.
That's vindication for Zaslav, who has spent nearly four years being criticized by Hollywood and investors for failing to meet shareholder goals. With Friday's announcement, he effectively pulled victory from the jaws of defeat.
And yet, Paramount likely isn't done with its goal of buying all of Warner Bros. Discovery.
Paramount's Hostile Game
Ellison has wasted no time leading Paramount Skydance, transforming the company through deals and acquisitions.
Since the merger closed in August, Paramount has added top executives and high-profile Hollywood talent, such as the Duffer brothers. It secured the rights to develop a live-action film based on Activision's Call of Duty video game franchise and struck a $7.7 billion deal for the UFC rights.
Ellison's pursuit of Warner Bros. Discovery was his biggest effort since taking control of the company.
Paramount's lawyers sent a letter to Warner Bros. Discovery this week, which was first reported by CNBC, alleging that the sales process had been manipulated in the direction of Netflix. Paramount has accused Warner Bros. Discovery of not properly considering its $30, all-cash offer and instead selling it to Netflix as a predetermined outcome.
Netflix made an initial offer for WBD's studio and streaming assets of $27 per share, according to a person familiar with the matter. That surpassed Paramount's offer at the time and turned the trajectory of sales talks in the direction of Netflix, said the person, who asked not to be identified because the discussions were private.
Paramount was the only bidder interested in acquiring all of WBD's assets: the movie studio, the streaming service and the television networks. He has maintained that his offer is superior.
Paramount executives and advisers valued Discovery Global's network portfolio at about $2 a share, based on its expected trading multiple and estimated leverage ratio, according to people familiar with the matter, who asked not to be identified because the discussions were private. Discovery Global would include the CNN, TNT Sports and Discovery channels.
Warner Bros. Discovery believes Discovery Global could be worth $3 a share or more if it trades well in public markets, according to other people with direct knowledge of the matter.
Paramount has also argued that there are tax efficiencies for shareholders in acquiring the entire company rather than buying just part of it, and that the Netflix bid carries greater regulatory risk. The Trump administration's view of the proposed combination is one of “great skepticism,” CNBC reported Friday.
Paramount offered a $5 billion breakup fee if the proposed deal did not win regulatory approval, according to people familiar with the matter.
Netflix's offer included a $5.8 billion breakup fee should the deal fail to win regulatory approval, according to a filing Friday with the Securities and Exchange Commission.
Paramount is now weighing its options on whether to go directly to shareholders with a more improved offer, perhaps even greater than the $30 per share cash offer it presented to WBD this week.
If it does, Netflix would have a chance to match that offer. The end result would mean even more money for WBD shareholders… and more money for Zaslav.
—CNBC's Nick Wells contributed to this report.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC following Comcast's planned spinoff of Versant.
