Netflix has criticised Paramount’s $108 billion bid for Warner Bros Discovery (WBD), saying the rival studio is already saddled with quite a lot of debt.
The streaming giant’s co-chief executive, Greg Peters, said this while speaking to Financial Times, stating that Paramount’s offer “doesn’t pass the sniff test,” adding that most WBD shareholders have yet to endorse the rival bid.
Netflix is now pursuing an all-cash $82.7 billion offer, which it says offers greater certainty and could allow a shareholder vote as early as April.
If successful, the deal would give Netflix control of Warner Bros’ century-old film studio and HBO’s blockbuster catalogue, including Game of Thrones and Harry Potter.
Netflix has stressed a key distinction between the two bids, focusing on financial structure.
“Paramount already is saddled with quite a lot of debt,” Peters said, noting that the $30-per-share offer would require additional leverage he described as “pretty crazy.”
Netflix highlighted that its own balance sheet provides the stability to execute the acquisition without relying on risky borrowing.
Peters also argued that without Oracle co-founder Larry Ellison’s personal financing, Paramount would have “no chance in hell” of completing the deal.
The comments underscore Netflix’s position that Paramount’s financing is both complex and potentially risky, while its own all-cash approach offers a more secure path to acquisition.
Paramount’s bid for WBD has been structured with a mix of debt and equity. The $108 billion offer includes $55 billion in debt and $40 billion in equity backed by Larry Ellison, father of Paramount CEO David Ellison.
Paramount has managed to secure only about 7% of WBD shares through its tender offer, well short of the 50% required for control, but has indicated it may increase the offer. Analysts have raised questions about whether further increases are feasible given Paramount’s existing leverage.
Netflix, on the other hand, has been building its content portfolio aggressively, reaching 325 million subscribers worldwide. The company has signalled that its all-cash bid leverages its strong financial position to create a straightforward transaction without the uncertainties associated with heavy borrowing.
The competition for WBD has drawn global attention, as a merger with Netflix could reshape Hollywood’s entertainment landscape.
The combined entity would unite Netflix hits like Stranger Things and Squid Game with Warner classics, potentially redefining production, distribution, and revenue models.
Reports indicate Netflix may shorten exclusive theatrical windows or release films directly to streaming, a move that could disrupt traditional cinema revenue.
Paramount has defended its approach, with Gerry Cardinale, founder of RedBird Capital and Paramount Skydance’s second-largest shareholder, calling Netflix’s all-cash bid “smoke and mirrors,” claiming it relies on transferring billions in debt to WBD’s Discovery Global spin-off. He described the deal as “the Harry Houdini of deals.”
Paramount has defended its approach, with Gerry Cardinale, founder of RedBird Capital and Paramount Skydance’s second-largest shareholder, calling Netflix’s all-cash bid “smoke and mirrors,” claiming it relies on transferring billions in debt to WBD’s Discovery Global spin-off. He described the deal as “the Harry Houdini of deals.”
As the tug-of-war unfolds, Netflix is positioning itself as financially disciplined and ready to execute the deal, while portraying Paramount as over-leveraged and reliant on external backers.