The New York Budgets

Tag: Warner Bros. Discovery 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?

  • Warner Bros. Discovery Reportedly Exploring Sale as Media Landscape Shifts

    Warner Bros. Discovery Reportedly Exploring Sale as Media Landscape Shifts

    A Warner Bros sign in Warsaw, Poland, on 6 August 2024. © Aleksander Kalka/NurPhoto via Getty Images
    Stock Widget

    Paramount PARA +4.85% ▲, backed by billionaire Larry Ellison and his family, has officially opened the bidding for rival Warner Bros. Discovery WBD +3.40% ▲ — a potential massive merger that would dramatically change Hollywood.

    Warner Bros. Discovery’s board rejected Paramount’s initial bid of about $20 a share, but talks are continuing, according to two people close to the companies who were not authorized to speak publicly.

    One of the knowledgeable sources said Paramount was preparing a second bid.

    Warner Bros. Discovery owns HBO, CNN, TBS, Food Network, HGTV and the prolific Warner Bros. movie and television studio in Burbank.

    Ellison, one of the world’s richest men, is committed to helping his 42-year-old son, David, pull off the industry-reshaping acquisition and has agreed to help finance the bid, two people close to the situation said.

    The younger Ellison, who entered the movie business 15 years ago by launching his Skydance Media production company, was catapulted into the major leagues this summer with the Ellison family’s purchase of Paramount’s controlling stake.

    Since then, David Ellison and his team have made bold moves to help Paramount shake more than a decade of doldrums. Buying Warner Bros. Discovery would be their most audacious move yet. The merger would lead to the elimination of one of the original Hollywood film studios, and could see the consolidation of CNN with Paramount-owned CBS News.

    Representatives for Paramount and Warner Bros. Discovery declined to comment.

    CNBC reported Friday that two companies have been in discussions for weeks following last month’s news that Paramount was planning a bid. Bloomberg reported Saturday that Warner Bros. Discovery had rejected Paramount’s bid of about $20 a share.

    Industry veterans were stunned by the speed of Paramount’s play for Warner Bros. Discovery, noting that top executives had begun working on the bid even as they were putting finishing touches on the Paramount takeover.

    One of Paramount’s top executives is a former Goldman Sachs banker, Andy Gordon, who was a ranking member of RedBird Capital Partners, the private equity firm that has teamed up with the Ellisons and has a significant stake in Paramount.

    Paramount’s interest prompted stocks of both companies to soar, driving up the market value for Warner Bros. Discovery.

    Paramount’s offer of $20 a share for Warner Bros. Discovery was less than what some analysts and sources believe the company’s parts are worth, leading the Warner Bros. Discovery board to rebuff the offer, sources said.

    But many believe that Paramount needs more content to better compete in a landscape that’s dominated by tech giants such as Netflix and Amazon.

    Paramount has reason to move quickly.

    Warner Bros. Discovery had previously announced that it was planning to divide its assets into two companies by next April. One company, Warner Bros., would be made up of HBO, the HBO Max streaming service and the Burbank-based movie and television studios. Current Chief Executive David Zaslav would run that enterprise.

    The other arm would be called Discovery Global and consist of the linear cable television channels, which have seen their fortunes fall with consumers’ shift to streaming.

    The Paramount bid was seen as an attempt to slip in under the wire because other large companies, including Amazon, Apple and Netflix, may have been interested in buying the studios, streaming service and leafy studio lot in Burbank.

    However, Netflix’s co-chief executive Greg Peters appeared to downplay Netflix’s interest during an appearance last week at the Bloomberg Screentime media conference. “We come from a deep heritage of being builders rather than buyers,” Peters said.

    Some analysts believe Paramount’s proposed takeover of Warner Bros. Discovery could ultimately prevail because Zaslav and his team have made huge cuts during the past three years to get the various businesses profitable after buying the company from AT&T, which left the company burdened with a heavy debt load. The company has paid down billions of dollars of debt, but still carries nearly $35 billion of debt on its books.

    Others point to Warner Bros.’ recent successes at the box office as evidence that Paramount is offering too little.

    Despite the tumult at the corporate level, Warner Bros.’ film studio has had a successful year. Its fortunes turned around in April with the release of “A Minecraft Movie,” which grossed nearly $958 million worldwide, followed by a string of hits including Ryan Coogler’s “Sinners,” James Gunn’s “Superman” and horror flick “Weapons.”

    Meanwhile, Paramount has been on a buying spree.

    Just in the last two months, Paramount made a $7.7 billion deal for UFC media rights and closed two deals that will pay the creators of “South Park” more than $1.25 billion over five years to secure streaming rights to the popular cartoon.

    Last week at Bloomberg’s Screentime media conference, Ellison declined to comment on Paramount’s pursuit of Warner Bros. or even whether his company had already made a bid. But he did touch briefly on consolidation in Hollywood, saying, “Ironically, it was David Zaslav last year who said that consolidation in the media business is important.”

    “There are a lot of options out there,” he added, but declined to elaborate.

    After news of Paramount’s interest surfaced, Warner Bros. Discovery’s stock jumped more than 30%. It climbed as much as $20 a share, but closed Friday at $17.10, down 3.2%.

    Paramount also has seen its stock surge by about 12%. Shares finished Friday at $17, down 5.4%

    Warner Bros. Discovery is now valued at $42 billion. Paramount is considerably smaller, worth about $18.5 billion.

  • Warner Bros. Discovery Signals Trouble Ahead for HBO Max Users

    Warner Bros. Discovery Signals Trouble Ahead for HBO Max Users

    Stock Widget

    In the cozy ritual of unwinding after a long day—perhaps curling up with an episode of The Last of Us or bingeing a classic like The Sopranos—streaming services like HBO Max have become a sanctuary for millions. These platforms offer more than mere entertainment; they provide escapism, education through documentaries, and a sense of community around beloved stories. Yet, as the streaming wars rage on, the comfort of affordable access may soon be disrupted. Warner Bros. Discovery WBD -1.85% ▼, the powerhouse behind HBO Max, is signaling significant changes that could hit subscribers’ wallets and habits hard. CEO David Zaslav’s recent comments at a high-profile investor conference have ignited concerns about impending price hikes and a tougher stance on password sharing, potentially reshaping the user experience for the service’s 125.7 million global subscribers.

    HBO Max, which reverted to its original name from “Max” in July 2025 after a brief rebranding experiment, remains a titan in the streaming landscape. According to FlixPatrol data, it ranks as the fourth most-subscribed platform worldwide, trailing only Netflix, Amazon Prime Video, and Disney+. This popularity stems from its prestige content—think Emmy-winning dramas like Succession and Euphoria, blockbuster franchises from the DC Universe, and a vast library of timeless films and series. A Reddit thread from late 2024, still buzzing with activity nine months later, captures the fervor: Subscribers rave about the “high-quality/prestige content,” the “rich library of older and favorite shows/movies,” exclusive originals, and solid value for money. One user summed it up: “It’s the only service where I feel like I’m getting premium TV without the cable bill.”

    But not all feedback is glowing. Some users gripe about technical glitches like buffering on certain devices, an overload of reality TV, and the occasional removal of older exclusives. These pain points, while minor compared to the praise, highlight the platform’s imperfections in a hyper-competitive market. Now, with Zaslav’s bold assertions, the focus is shifting from content quality to cost—and how WBD plans to extract more revenue from its loyal base.

    Zaslav’s Price Hike Tease: A Bet on Premium Content

    Speaking at the Goldman Sachs Communacopia + Technology Conference in San Francisco on September 11, 2025, Zaslav painted an optimistic picture of HBO Max’s trajectory while dropping hints that could spell trouble for users. “People are really starting to love HBO Max. That’s the key,” he said, emphasizing the platform’s “differentiated offering” outside the U.S. and the influx of top-tier talent like Chuck Lorre (The Big Bang Theory), Bill Lawrence (Ted Lasso), and Mindy Kaling (The Mindy Project). This creative firepower, Zaslav argued, gives WBD “real optional leverage” to keep hits in-house or license them elsewhere, bolstering its negotiating power.

    The CEO didn’t mince words on pricing: “We think we’re way underpriced.” He recalled the days when consumers shelled out $55 monthly for traditional cable packages, contrasting that with today’s streaming fees, which he views as a bargain despite the proliferation of services. “We’re going to take our time, because we’re really growing now and people are spending more and more time with us. But we think that there’s real upside to that. And it’s hard to replace quality content that people love,” Zaslav stated, according to a Seeking Alpha transcript. This comes on the heels of the last price adjustment in June 2024, when tiers saw modest increases amid broader industry trends.

    Current HBO Max plans, as listed on the company’s website, include:

    PlanMonthly PriceAnnual Price (16% Savings)Key Features
    Basic with Ads$9.99$99.99HD streaming, 2 devices, ads during content
    Standard$16.99$169.99Ad-free (except sports/live), 2 devices, Full HD, downloads
    Premium$20.99$209.99Ad-free, 4 devices, 4K UHD, Dolby Atmos, offline downloads

    Prices exclude taxes, and live sports streaming is limited to two concurrent streams on Standard and Premium tiers. While these rates already position HBO Max as pricier than rivals—Netflix’s ad-supported plan starts at $6.99, Disney+ at $7.99—Zaslav believes the prestige factor justifies hikes. Analysts note that competitors like Peacock and Apple TV+ raised prices by $3 in recent months, setting a precedent. However, in a market where the average household subscribes to four services and spends about $160 monthly on entertainment (per a TiVo survey), further increases risk subscriber churn.

    WBD’s streaming segment is already profitable, posting $293 million in Q2 2025 earnings, a turnaround from last year’s loss. This financial health, coupled with content investments, emboldens Zaslav’s strategy. Yet, critics argue it’s tone-deaf amid economic pressures; one Slashdot commenter quipped, “Your service is not a necessity… worth exactly how much people are willing to pay.”

    Growth Projections: 150 Million Homes by 2026

    Zaslav’s confidence extends to subscriber forecasts. He projected HBO Max reaching “over 150 million homes next year,” building on Q2 2025’s addition of 3.4 million users to hit 125.7 million globally—mostly from international markets, with just 200,000 domestic adds. In regions like Europe and Latin America, HBO content dominates viewing on platforms like Sky, where it accounts for 50% of non-sports consumption. Fans there are clamoring for returns like Euphoria, The Gilded Age, and The Last of Us Season 2, all branded as HBO.

    This expansion aligns with WBD’s broader ambitions. The company, which merged WarnerMedia and Discovery in 2022, is set to split into two entities by Q2 2026: one focused on studios and streaming (led by Zaslav, including HBO Max and DC Studios), the other on linear networks. Streaming profitability is expected to top $1.3 billion in 2025, driven by global rollouts and bundled offerings like the Disney+/Hulu/HBO Max package at $16.99 (ad-supported) or $29.99 (ad-free). As of May 2025, combined Max and Discovery+ subs stood at 122.3 million, per Wikipedia data, underscoring steady growth despite U.S. saturation.

    The Password Sharing Crackdown: No More Free Rides

    Compounding the price concerns is WBD’s renewed push against password sharing, a scourge costing the industry an estimated $25 billion annually—a 2022 Citi report pegged Netflix alone at $6.25 billion in losses. Zaslav admitted at the conference that HBO Max “hasn’t been pushing” on this yet, prioritizing user engagement first. “We want them to fall in love with our content,” he said, echoing strategies from Netflix’s 2023 crackdown, which netted 5.9 million new subs post-enforcement.

    The groundwork is laid. During the August 2025 earnings call, Global Streaming and Games CEO JB Perrette detailed months of data refinement to identify “legitimate users.” Starting September 2025, messaging will turn “more aggressive,” requiring extra-household sharers to pay a $7.99/month “Extra Member Add-On” or face lockouts. “We’ve spent a lot of the last several months… making sure that our data sets on figuring out who is a legitimate user… [are] in the right place,” Perrette said, per an Insider Monkey transcript. Full impact is eyed for Q4 2025 and 2026 financials, potentially converting sharers into paying users.

    This follows softer nudges earlier in 2025, including profile transfers and voluntary add-ons. HBO Max defines a “household” as the account owner and cohabitants, with enforcement via IP addresses and device tracking—methods that have sparked privacy debates but boosted rivals’ revenues. For users, it means no more mooching on a friend’s login for House of the Dragon; expect prompts to subscribe independently or pay extra.

    Subscriber Backlash and Broader Implications

    These moves arrive amid a maturing streaming market plagued by “subscription fatigue.” Antenna research shows specialty services like HBO Max grew 12% year-over-year in 2025, but churn rates hover around 8% quarterly as costs rise. Reddit threads already buzz with frustration: “Another hike? I’ll rotate with Netflix,” one user posted. WBD stock, up 52% year-to-date to $16.17, reflects investor optimism, but consumer sentiment tells a different story. Zaslav’s $50 million-plus compensation package has also drawn ire, especially after content purges for tax benefits.

    On the flip side, HBO Max’s strengths—its 4K offerings, offline downloads, and exclusives—could retain loyalists. Bundles and student deals (Basic with Ads at $4.99/month via UNiDAYS) offer relief. As WBD eyes 150 million subs by 2026, the challenge is balancing profitability with accessibility. For now, Zaslav’s vision positions HBO Max as a premium powerhouse, but at what cost to its devoted fans?