OAN Staff Blake Wolf
11:55 AM – Wednesday, December 17, 2025
The Warner Bros. Discovery (WBD) board of directors issued a formal recommendation urging shareholders to reject the hostile tender offer from Paramount Skydance, controlled by the Ellison family, arguing that the offer is “illusory” and “imposes numerous, significant risks and costs.”
In their letter to shareholders and official press release, the board explicitly stated that Paramount has consistently misled WBD shareholders by claiming its bid had a “full backstop,” meaning full equity financing guarantee, from the Ellison family — further asserting that “It does not and never has.”
Warner Bros. Discovery’s board rejection of Paramount Skydance’s hostile takeover offer strengthens Netflix’s position in its agreed deal to acquire WBD’s studio and streaming assets — including the HBO Max streaming service, Warner Bros. movie and TV studios, and rights to iconic intellectual property such as Batman, Harry Potter, and Bugs Bunny — which would represent a major shakeup in Hollywood.
On Wednesday, the WBD board unanimously asserted that Paramount’s $108 billion all-cash offer remains inferior to Netflix’s cash-and-stock deal worth $83 billion, largely due to the legal entity backing the Paramount bid being a revocable trust run by billionaire Oracle co-founder and chairman Larry Ellison.
A revocable trust provides far weaker certainty and enforceability than a conventional equity commitment, as its contents are not public or audited, not legally binding, and can be changed or canceled at any time.
“A revocable trust is no replacement for a secured commitment by a controlling stockholder,” the WBD board of directors wrote in a letter to stockholders on Wednesday.
The letter began by proclaiming that the board “reiterates [its] recommendation” in support of the Netflix deal, “which represents superior, more certain value for shareholders.”
The board continued, adding that the Paramount offer “reflects inadequate value and imposes numerous, significant risks and costs,” adding that the “Ellison family has still not provided an equity backstop” despite “repeatedly” informing Paramount of the importance of including “a full and unconditional financing commitment from the Ellison family.”
“[Paramount Skydance] has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family. It does not, and never has.”
Paramount Skydance, led by Larry Ellison’s son, David Ellison, has argued that the company has not been treated fairly in the auction process, while arguing that its offer “delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix.”
Paramount also countered WBD’s concerns over the revocable trust by noting that the Ellison family trust is equipped with over $250 billion in assets, arguing that it is “absurd” to suggest that the family wouldn’t uphold their end of the deal.
“In reality, it is all quite simple,” Paramount stated. The bid is “fully backstopped by a well-capitalized trust (in existence for approximately 40 years) of one of the most well-known founders and entrepreneurs in the world, Larry Ellison.”
Netflix also issued a statement in response, proclaiming that the company “welcomed” the board’s decision to recommend stockholders reject the unsolicited offer from Paramount Skydance.
“The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders,” stated Netflix co-CEO Ted Sarandos.
“This was a competitive process that delivered the best outcome for consumers, creators, stockholders, and the broader entertainment industry. Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen,” he added.
Additionally, Affinity Partners, a private equity firm owned by President Donald Trump’s son-in-law, Jared Kushner, is no longer backing Paramount’s bid for WBD, potentially removing an advantage Paramount had with the Trump administration.
“With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity,” the firm announced on Tuesday. “The dynamics of the investment have changed significantly since we initially became involved in October. We continue to believe there is a strong strategic rationale for Paramount’s offer.”
Regardless of whether Netflix or Paramount Skydance ultimately prevails in acquiring Warner Bros. Discovery, the transaction will require antitrust approval from federal regulators under the Trump administration due to significant market concentration concerns in streaming and content production.
President Trump recently indicated that Netflix’s proposed deal “could be a problem” because of the resulting market share, signaling potential scrutiny.
Nevertheless, WBD stated on Wednesday that the board does not believe there is a “material difference” in the risks both the Paramount and Netflix deals face in being approved by federal regulators.
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