Hollywood Showtime: Netflix vs Paramount for Warner Bros

It’s showtime in the stock market and for consumers, as two of the world’s biggest entertainment giants, Netflix and Paramount, battle to acquire the world-renowned movie producer Warner Bros. This high-stakes showdown isn’t just about Hollywood; it has implications for streaming platforms and content availability worldwide, including here in South Africa.

South African Context: MultiChoice Changes

In South Africa, MultiChoice (now a subsidiary of Canal+) recently announced it would be dropping several channels from both Warner Bros. Discovery and Paramount. The move highlights the growing competition between traditional satellite TV, like DStv, and streaming platforms, as South African and African viewers increasingly weigh which option provides the best access to premium content. As more consumers explore streaming alternatives, the battle for Warner Bros.’ library could influence subscriptions, content availability, and the overall appeal of DStv compared to global streaming services.

Who Is Warner Bros?

Warner Bros. is the media powerhouse behind many iconic films we all recognise, including Harry Potter, Batman, Wonder Woman, The Lord of the Rings, Barbie, and Godzilla x Kong. As many say: the moment you see the Warner Bros. logo, you know the movie will be good. Its vast library and beloved franchises make it one of the most coveted media companies in the world, and the reason Netflix and Paramount are competing so fiercely.

Netflix’s Pitch to Shareholders

Netflix’s offer highlights the strategic value of Warner Bros.’ franchises. The company stated that its proposed transaction “unites Warner Bros.’ iconic franchises and storied libraries with Netflix’s leading entertainment service, creating an extraordinary offering for consumers… offering more choice, greater value, more opportunities for the creative community, and generating shareholder value.” In other words, Netflix sees Warner Bros. as a way to strengthen its content lineup and create a one-stop entertainment platform.

Paramount’s Hostile Takeover Bid

Paramount, the studio behind Mission: Impossible, Transformers, SpongeBob SquarePants, Teenage Mutant Ninja Turtles, and Titanic, is taking a more aggressive approach. After several unsuccessful negotiations, it launched a hostile takeover bid, arguing that Warner Bros. did not meaningfully engage with proposals that Paramount believes would have been in shareholders’ best interests. Paramount contends that a combined Paramount–WBD entity would create a stronger, more profitable direct-to-consumer platform, while also better supporting the creative community and global cinema.

What Each Company Is Offering Shareholders

The two bids differ significantly in structure:

Netflix’s cash-and-stock offer:

• $23.25 in cash per WBD share
• $4.50 in Netflix shares per WBD share, subject to a collar
• If Netflix’s 15-day VWAP is between $97.91 and $119.67, shareholders receive Netflix shares worth $4.50
• If the VWAP is below $97.91, they receive 0.0460 Netflix shares per WBD share
• If the VWAP is above $119.67, they receive 0.0376 Netflix shares per WBD share

Paramount offers a simpler approach: an all-cash bid of $30.00 per share.

Impact on Consumers and Pricing

These corporate battles aren’t just important for investors, they also affect consumers. Major acquisitions often lead to higher subscription fees. If Netflix acquires Warner Bros., it could introduce a higher-priced tier or increase monthly fees to accommodate the expanded content library. Popular shows like Stranger Things, Black Mirror, Boots, and Sandman could all appear on one platform alongside WBD content, offering a unified viewing experience.

Paramount, on the other hand, warns that Netflix’s plan risks higher prices for consumers, lower pay for creators, and potential harm to theatrical releases. Paramount argues that its all-cash bid better supports both the creative community and global cinema, while promoting a more competitive entertainment landscape.

Timeline and What Happens Next

These developments come as Warner Bros. prepares to split into two publicly listed companies. Netflix aims to acquire the Studio and Streaming businesses, while Paramount intends to buy the entire company.

Netflix’s deal, which the company plans to fund using new debt, a long-standing approach often referred to as “Debtflix”, is expected to close within 12–18 months, following the separation of WBD’s Global Networks business in Q3 2026 and after securing all regulatory and shareholder approvals. Paramount’s board-approved tender offer expires on January 8, 2026, unless extended. Paramount has arranged financing through new equity and debt commitments from Bank of America, Citi, and Apollo and plans to move quickly through regulatory processes.

Prospective and Existing Shareholders

For potential investors, the battle for Warner Bros. could present a rare opportunity to gain exposure to some of the world’s most valuable media assets. Netflix’s cash-and-stock offer could provide a combination of immediate liquidity and potential long-term upside tied to its expanding content library, while Paramount’s all-cash bid offers certainty and an attractive premium.

Depending on which offer succeeds, investors could diversify their portfolios through exposure to global entertainment franchises and a strengthened position in the fast-growing streaming and direct-to-consumer market.

Conclusion

These deals highlight the evolving dynamics of the media industry, where consolidation can create significant competitive advantages but also carries execution risks. Investors must weigh the potential for higher returns from combined content powerhouses against regulatory uncertainties and market competition. Whether through Netflix’s strategic acquisition or Paramount’s full takeover, the outcome is likely to shape the entertainment landscape for years to come, offering both opportunity and insight into the future of global media.

For investors, owning shares in all three companies, Netflix, Paramount, and Warner Bros., could capture the potential upside regardless of which deal succeeds, while picking a single winner could be riskier. Buying all three stocks spreads risk, allowing investors to benefit no matter which company performs best or wins the deal

Sources – EasyEquities.

Follow Cay-Low Mbedzi

@caylow_SA

Government bonds offer a reliable way to earn fixed income by lending money to the government in exchange for regular interest payments. 

Dividends are one of the many key components of investing, representing a share of a company's profits distributed to its shareholders. 

Special dividends, also known as extraordinary dividends, are one-time payments made by companies to shareholders due to specific financial events, like windfall profits or asset sales.