The Topic is Trek

Posted by Clinton

Some deals never seem to end.

If you follow “The Topic is Trek,” you know I have tried to keep up with the various mergers and acquisitions (M&A) dramas Paramount has been involved in over the past few years. But, to quote Illa Dax from a recent episode of Star Trek: Starfleet Academy, “It’s a lot. A lot”.

Rather than cover this all on the podcast,, I thought I would use this post to provide an update on where things stand in the possible acquisition of Warner Bros. Discovery by either Paramount, a Skydance Corporation, or Netflix, a former DVD rental corporation. (warning: things are changing rapidly and this information may be outdated quickly.)

The short version of how we got here.

On December 5th of last year, Warner Bros. Discovery concluded its assessment of purchase offers and accepted an $82.7 billion bid from Netflix. This offer was for the studio, HBO/HBO Max (or whatever it’s called this week), Warner Games, and some other assets. It did not include cable and sports assets, such as CNN, TNT Sports, and the Discovery channels.

While it seemed the deal was done, three days after the announcement, Paramount Global announced a competing $108.4 billion all-cash tender offer to acquire Warner Bros. Unlike Netflix’s bid, Paramount’s offer encompasses Warner Bros.’ complete list of operations, spanning film and TV studios, the Max streaming platform, and even traditional cable networks like TNT and CNN. This comprehensive approach is similar to the one Skydance used during its 2024 negotiations to purchase Paramount Global.

Fast forward to now.

Often in M&A agreements, there is a “go shop” period, during which the acquired entity can see if there are better offers—kind of like getting engaged but still going out clubbing for a month “just in case”. Paramount has been taking advantage of this period by working on a new offer. Meanwhile, Netflix co-CEO Ted Sarandos has remained confident, telling the press his thoughts on Paramount’s efforts: “If you wanna try and outbid our deal … just make a better deal… Don’t make up stories, don’t spread misinformation”.

As of this writing, Paramount may have actually come up with that better deal. The Warner Bros. board has agreed to consider Paramount’s revised $110.9 billion all-cash acquisition bid, calling it potentially “superior” to the Netflix offer for its studio and streaming assets. In addition to adding $2.48 billion in cash to its previous $108.4 billion bid, Paramount agreed to increase its termination fee—what it would pay if the acquisition falls through—to $7 billion.

If Warner Bros. accepts this new offer, the game still isn’t over, as Netflix will have four days to submit a counter bid.

Okay. Now we just wait. Right?

Well, yes and no.

Yes, we will be waiting to see what the Warner Bros. board recommends. But no, because there are plenty of other parts in motion that need to be examined.

For instance, Paramount has been pursuing other options on how to go about acquiring Warner Bros. One of these methods involves Paramount initiating steps to nominate a new slate of Warner Bros. directors, attempting to install board members who would favor their bid over Netflix’s.

Also, Ancora Holding Group, which holds an approximately $200 million stake in Warner Bros., released a presentation slamming the Netflix deal as “flawed, inferior and high risk,” arguing it forces shareholders to gamble on a linear TV spin-off at a later date. The firm threatened that unless the Warner Bros. board re-engages with Paramount to secure a superior proposal, Ancora intends to mount a “VOTE NO” campaign against the Netflix transaction. Despite this, the broader Warner Bros. shareholder base appears to favor the Netflix agreement. Warner Bros. recently disclosed that more than 93% of its shareholders had rejected Paramount’s previous “inferior scheme”. Shareholders are officially scheduled to vote on the Netflix acquisition at a special meeting on March 20, 2026.

“All Mergers & Acquisitions is local“

It’s here that we get to the part of the story where government and politics begin to insert themselves. I’ll try to be as brief as possible. But, again, “It’s a lot.”

ITEM: Not waiting to see who wins, Lawmakers Adam Schiff and Laura Friedman are pressuring both Netflix and Paramount to make concrete commitments to preserve Los Angeles-based Hollywood jobs.ITEM: The DOJ Antitrust Division is currently assessing Netflix’s market power and dealmaking. Netflix co-CEO Ted Sarandos told Variety recently that he has been working hard to combat the perception that Netflix has an outsized share of the market.
ITEM: After Paramount CEO David Ellison declined an invitation to testify at a recent antitrust hearing, eight Democratic senators sent Ellison a letter, accusing the CEO of a “pattern of evasion”. They legally directed him to preserve all communications related to the deal, specifically demanding records of any interactions with President Trump, his family, and DOJ officials, as well as answers regarding Paramount’s $16 million settlement over a 60 Minutes interview.
ITEM: On February 19th, Paramount claimed that since the DOJ had not contacted them with regards to their Hart-Scott-Rodino (HSR) Antitrust Act submissions, this meant there was “no statutory impediment” to closing their takeover of Warner Bros. Netflix quickly fired back, accusing Paramount of misleading stockholders, noting that routine HSR milestones do not automatically indicate DOJ approval. In a move that some view as related to the Warner Bros. sale, Gail Slater, the Assistant Attorney General to the DOJ’s Antitrust Division was fired on February 12th.
ITEM: President Donald Trump told NBC News on February 4th that he “shouldn’t be involved” in the dispute over the ongoing sale of Warner Bros., saying that the “Justice Department will handle it”. Then, on February 21st, Trump took to Truth Social to demand that Netflix immediately oust former UN ambassador and Netflix board member Susan Rice or “pay the consequences”. Netflix co-CEO Sarandos responded in an interview by saying “This is a business deal. It’s not a political deal”. But now, Sarandos plans to visit the White House for meetings on February 26th, though it is not clear whether he will actually be meeting with the President.
ITEM: Paramount CEO David Ellison attended this year’s State of the Union address as a guest of Republican Senator Lindsey Graham.
ITEM: On February 25th, 11 Republican state attorneys general sent a letter to U.S. Attorney General Pam Bondi, insisting that the federal government heavily scrutinize Netflix‘s bid for Warner Bros. In part, they argued that they believe the merger would likely result in undue market concentration that stifles competition, thereby creating higher prices, lower reliability, and less innovation for consumers. They strongly encouraged the DOJ to put the proposed merger through a “thorough and exacting review under the Clayton Act”.

And what do the folks who work at Warner Bros. think?

While rank-and-file Warner Bros. employees once rooted for Paramount to be the winner of this battle, the tide has been turning. Shortly after announcing their deal with Warner Bros., Netflix co-CEOs Ted Sarandos and Greg Peters visited the Warner Bros. studio lot and addressed employees in a town hall-style appearance to work to address concerns about the sale. Meanwhile, Paramount Skydance’s relentless cost cutting and layoffs have become a warning sign for Warner Bros. staffers. In addition, people were taking note of how David Ellison has been dealing with the Trump administration and implementing fundamental corporate culture shifts, such as moving CBS News to the right. The growing concern is the pandemonium David and Larry Ellison are causing at Paramount will probably spill over into Warner Bros. should they be the victors in the battle.

In the end, as I continue to cover this story, I sympathize with one Warner Bros. staff member who told Variety, “People just want this to be over.”