In a formal filing on Wednesday, WBD told shareholders that Paramount’s $30-per-share offer “provides inadequate value” and comes with “numerous, significant risks and costs.” The company urged investors to support WBD’s current plan, which includes selling major assets to Netflix.
WBD, the parent company of CNN, acknowledged that the final decision rests with shareholders. Some investors have already signaled they may ignore the board’s recommendation and tender their shares to Paramount anyway.
Financing Raises Red Flags
A key issue for WBD is whether Paramount can reliably finance the deal. The offer is backed largely by funding from the royal families of Saudi Arabia, Qatar, and Abu Dhabi. WBD questioned why Paramount’s owners are relying so heavily on outside investors rather than contributing more of their own money.
Paramount insists its financing is “airtight” and says any doubts are “absurd.” The company has also stated that the Ellison family — led by Oracle founder Larry Ellison, one of the world’s richest people — is fully backing the bid.
WBD strongly disputes that claim. In its letter, the board said the Ellisons are not, and never have been, fully backstopping the offer.
Political and Security Concerns Grow
The Middle Eastern financing has drawn scrutiny from U.S. lawmakers. Representatives Sam Liccardo and Ayanna Pressley warned that the deal could raise national security concerns by giving foreign-backed financiers influence over a major American media company.
Paramount has said those investors would give up all voting rights and governance roles if the deal goes through. However, that promise has only increased questions about why the royal families want to invest in the first place.
Complicating matters further, another key financing partner — Jared Kushner’s private equity firm, Affinity Partners — pulled out of the deal on Tuesday. Affinity said it still believes Paramount’s offer makes strategic sense but has decided not to continue pursuing the opportunity.
Netflix Deal Moves Ahead
While the takeover battle plays out, Netflix is moving forward with its plan to acquire some of WBD’s most valuable assets, including the Warner Bros. movie studio and the HBO Max streaming service.
Netflix co-CEOs Greg Peters and Ted Sarandos told employees that the agreement is strong and beneficial for shareholders, consumers, and industry jobs. They said they are confident the deal will receive regulatory approval.
Under the current plan, WBD will split into two publicly traded companies next summer. Netflix would then seek approval to buy the Warner Bros. entertainment assets, while a new company called Discovery Global would retain CNN and other cable networks.
Trump Weighs In
President Donald Trump has signaled that he plans to be involved in the regulatory review and suggested he favors Paramount’s bid. His comments appeared driven largely by his long-standing criticism of CNN.
“I think the people that have run CNN for a long period of time are a disgrace,” Trump said last week. “I think it’s imperative that CNN be sold.”
What Happens Next
Paramount’s current offer expires on January 8, though it could be extended. Analysts say Paramount may raise its bid, take legal action, or pursue other strategies.
For now, WBD is standing firm, betting that its Netflix deal is the safer and more valuable path — and leaving shareholders to decide which vision they trust more.
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