The New York Budgets

Tag: HBO Inc.

  • Paramount Wins Bidding War for Warner Discovery After Netflix Backs Out

    Paramount Wins Bidding War for Warner Discovery After Netflix Backs Out

    Paramount Global—now under the control of Skydance Media—has clinched a $81 billion deal to acquire Warner Bros. Discovery Inc., outbidding streaming behemoth Netflix Inc. after the latter bowed out, citing the escalated price as no longer viable. The victory for David Ellison’s Paramount caps a contentious takeover saga, uniting storied assets like HBO, CNN, and the DC Comics universe under one roof, while raising fresh antitrust alarms in an industry already grappling with consolidation and shifting viewer habits.

    Netflix co-CEOs Ted Sarandos and Greg Peters announced the withdrawal in a statement late Thursday, hours after Warner’s board deemed Paramount’s revised $31-per-share all-cash offer superior to Netflix’s $27.75-per-share bid for the studios and HBO Max alone. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they said, emphasizing fiscal discipline amid Wall Street’s scrutiny of Netflix’s ballooning content spend. The decision sent Netflix shares (NFLX) surging 10% in after-hours trading to $682.50, recouping some of the $170 billion market value erosion since rumors of its Warner pursuit surfaced in September 2025. Analysts at JPMorgan hailed the pullback as “prudent,” noting Netflix’s subscriber base hit 285 million in Q4, up 12% year-over-year, without the added debt burden.

    For Warner Bros. Discovery (WBD), the deal—pending regulatory nods—marks a lifeline under embattled CEO David Zaslav, whose cost-cutting regime has drawn ire but delivered hits like the Oscar-nominated “Sinners” and “One Battle After Another.” Zaslav, in a memo to staff, celebrated the merger as a value-maximizer for shareholders, projecting $6 billion in synergies through streamlined operations and shared IP like Harry Potter and Superman. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value,” he stated. Warner shares dipped 0.35% to $10.85 in regular trading but climbed 2% after-hours on merger optimism.

    Netflix Inc.
    Netflix Inc.
    Source: FactSet

    Paramount’s path to victory was fraught. Ellison, son of Oracle founder Larry Ellison, prioritized Warner after Skydance’s $8.4 billion takeover of Paramount in August 2025, viewing the combo as essential to compete against Disney, Netflix, and Amazon in the $500 billion global entertainment market. Initial overtures were rebuffed, but Paramount’s hostile $30-per-share bid in December—escalating to $31 this week—prevailed. Key concessions included a $7 billion termination fee for regulatory failures and covering Warner’s $2.8 billion breakup payout to Netflix, plus an accelerated “ticking fee” of 25 cents per share quarterly starting September 30.

    The merger creates a colossus: Paramount gains Warner’s film/TV studios, HBO Max (with 110 million subscribers), and cable nets like CNN, TNT, TBS, and Food Network—bolstering its Peacock and Paramount+ platforms amid a streaming wars projected to reach $240 billion by 2030, per PwC. Yet, hurdles loom. The Justice Department, already probing Netflix’s bid for anticompetitive practices, will scrutinize this tie-up, especially combining legacy studios and news outlets. Media watchdogs like Free Press’s Craig Aaron decried it as “unthinkable,” warning that folding CNN into CBS News could amplify biased coverage, particularly on sensitive issues like Israel’s actions in the Middle East—where consolidated ownership risks amplifying pro-Israel narratives at the expense of balanced reporting.

    Ellison’s revamp of CBS News—installing Bari Weiss as editor-in-chief to target “center-left to center-right” audiences—has sparked concerns of editorial shifts, potentially tilting foreign policy discourse. CNN President Mark Thompson urged staff not to “jump to conclusions,” but the deal’s scale—creating a entity with $60 billion in annual revenue—invites FTC intervention, especially post-Trump antitrust relaxations.

    Wall Street cheered the outcome: Paramount shares (PSKY) leaped 10.04% to $45.20, adding $12 billion to its market cap, while the S&P 500 Media Index rose 1.8%. “This is Ellison’s moonshot—scale to survive in streaming’s endgame,” said MoffettNathanson analyst Michael Nathanson, upgrading Paramount to Buy with a $55 target.

    As regulators deliberate, the merger underscores Hollywood’s consolidation imperative amid cord-cutting and ad market volatility. For Netflix, the retreat preserves cash for originals like “Squid Game” sequels; for Paramount, it’s a bet on IP synergy to challenge Disney’s $200 billion empire. But in an era of media monopolies, questions linger: Will this super-studio foster innovation or stifle diverse voices, especially on global hotspots like Israel-Palestine?

  • It seems the streaming service Max, which was previously known as HBO Max, will be going back to the name HBO Max. It’s a bit confusing, right?

    It seems the streaming service Max, which was previously known as HBO Max, will be going back to the name HBO Max. It’s a bit confusing, right?

    HBO, a trailblazer of the cable era, has been on a very bumpy ride finding an identity in the streaming era. (Warner Bros. Discovery)
    HBO, a trailblazer of the cable era, has been on a very bumpy ride finding an identity in the streaming era. (Warner Bros. Discovery)

    It’s not Max. It’s HBO Max — again.

    In a surprise pivot, Warner Bros. Discovery executives announced Wednesday morning that the streaming service Max would be renamed HBO Max, reinstating the app’s old name and abandoning a contentious change that the company introduced two years ago.

    The reason for the change, executives explained, is straightforward.

    People who subscribe and pay $17 a month for the streaming service wind up watching HBO content like “The White Lotus” and “The Last of Us,” as well as new movies, documentaries and not a whole lot more.

    “It really is a reaction to being in the marketplace for two years, evaluating what’s working and really leaning into that,” Casey Bloys, the chairman of HBO content, said in an interview.

    HBO, a trailblazer of the cable era, has been on a very bumpy ride to finding an identity in the streaming era. There was HBO Go (2008), HBO Now (2015), HBO Max (2020), Max (2023) and now, once again, HBO Max (2025).

    Two years ago, Warner Bros. Discovery executives said that they meant well by changing the name to Max. Their overwhelming concern, the executives said, was that Discovery’s suite of reality shows — “Sister Wives,” “My Feet Are Killing Me” — risked watering down the HBO brand, which continued to produce award-winning series like “Succession.”

    Further, they said, HBO spent decades branding itself as a premium adult service. That was not exactly an ideal anchor for a streaming service that they envisioned would compete head to head with a general entertainment app like Netflix.

    Instead, the name change to Max mostly seemed to cause widespread confusion, both within the entertainment industry and generally among consumers. Was HBO dead? Was it being marginalized? What gives?

    In the last few years in the so-called streaming wars, Netflix has taken a runaway lead over old-guard entertainment brands, drawing roughly 8 percent of all television time in March, according to Nielsen. Warner Bros. Discovery drew 1.5 percent, a little more than Peacock but below Disney’s streaming services, Amazon Prime Video, Paramount, Roku and Tubi, Nielsen said.

    Executives have conceded in recent months that competing with an everything-for-everybody app like Netflix, which has more than 300 million subscribers, was not realistic. Instead, they would be perfectly happy to be a complementary service.

    “We started listening to consumers saying, ‘Hey, we don’t really want more content, we want something that is different, we want to end the death scroll with something that is better,’” JB Perrette, the president of streaming for Warner Bros. Discovery, said in an interview.

    Warner Bros. Discovery executives also discovered over the last two years that much of Discovery’s content was not being watched. Original programs tended to do the best on the service, as did new Warner Bros. movies, licensed A24 films and documentaries. Some Discovery content, particularly from its ID cable network, did well, but everything else — food, lifestyle and other reality series from Discovery — went relatively untouched. (Discovery+ remains available as a stand-alone streaming option.)

    Max has seen encouraging results in recent months. The streaming division at Warner Bros. Discovery is now profitable, and its subscriber count jumped another five million in the first three months of the year, bringing its total number of subscribers to over 122 million. The app recently rolled out to Australia and France, and next year it will be introduced to Britain, Germany and Italy.

    There have also been hints of a bigger change. Just a few weeks ago, Max changed its color scheme back to the old-school HBO’s black and white, leaving behind the blue palette that the company introduced in 2023 with the brand pivot.

    Mr. Bloys said that the transition to streaming has been tricky for many cable companies. HBO “and a bunch of other companies are trying to navigate that,” he said.

    “That said,” he continued, “I do hope this is the last time we have a conversation about the naming of the service.”