Paramount vs. Netflix:

IS THIS THE FINALE?

A Netflix “Stranger Things” display (Kayla Bartkowski/Getty Images)

Barring a crazy development, Netflix will own Warner Bros.

This M&A fight is nearly over. But would the Trump administration challenge the deal on regulatory grounds? Stranger things have happened.

1/8/26 12:05PM

To borrow a phrase you might hear during election night reporting: the path to victory for Paramount Skydance in its bid for Warner Bros. Discovery is narrowing. In fact, unless Paramount decides to change its tune, this fight is basically over.

Let’s recap: Paramount came out Thursday and said it was reaffirming its hostile takeover offer to buy Warner Bros. Discovery, saying its previous round of modifications had “cured every issue raised by WBD.” The Warner Bros. board, the kingmaker in this M&A process, clearly disagrees with that notion, having already rejected the terms of that offer.

If you read between the lines, what’s really happening here is that Paramount is saying “uncle” by refusing to sweeten its current offer. Barring Paramount coming back to the negotiating table with a higher offer, or something else crazy happening, Netflix has beaten out Paramount for ownership of Warner Bros. Discovery.

After years of running M&A coverage, I can pretty confidently say Warner Bros.’ board is not going to change its mind if things stay as is. So let’s talk about the potential crazy developments that might put the deal back in peril for Netflix, and how likely they are to happen.

One thing that could change the landscape here is a signal from the Trump administration that it would challenge the Warner Bros.-Netflix deal on regulatory grounds. President Trump has been asked about this in the past, and his responses weren’t definitive. At one point, he said Netflix taking over Warner Bros. “could be a problem.” A day later, he said:

“I know the companies very well. I know what they are doing. But I have to see… what percentage of market they have. We have to see the Netflix percentage of market, Paramount percentage of market. I mean, none of them are particularly great friends of mine. I want to do what’s right.”

Remember that Paramount Skydance is run by David Ellison, the son of close Trump ally and the Paramount’s deal backstopper Oracle billionaire Larry Ellison. Could the Trump administration have solid legal ground to challenge the deal based on the market size of the combining companies? Probably, but that picture is murky based on how you define the markets. Would this administration challenge a deal because it wants a friend’s deal to happen instead? I think it’s pretty unlikely. But let’s be real here: it has done crazier things than that.

The other potential avenue for a Paramount win is the fact that its bid is hostile, meaning it is appealing directly to Warner Bros. shareholders. Paramount is basically saying to anybody who owns a share of Warner Bros., “Give us your share, and we will pay you $30 in cash.” The goal is to acquire a majority of shares (unlikely) or at least buy enough to make noise to the Warner Bros. board that it’s wrong in rejecting the deal because many shareholders have decided to take its offer instead.

There are two problems with the hostile offer. One is that, to tender the shares to Paramount, you have to do this, all of which is pretty high-friction, according to Paramount:

Conditions for tendering a Warner Bros share — How a WBD shareholder would need to tender their shares to Paramount Skydance (via Paramount Skydance website)

And two is that the Paramount offer, at least on its face, sure looks financially inferior to Netflix’s! Paramount is offering $30 per share for the entire company. Netflix is offering a combination of cash and stock valued at $27.75 per share, as of when the deal was struck, for most of the company, but allowing for the company to also realize additional value by spinning out its cable TV networks business, called Discovery Global. That business, The Wall Street Journal has reported, could be worth several dollars per share. Of course, Paramount says its own analysis values that business at $0.00 per share. Convenient that they think it’s not worth even a penny!

There are nearly 2.5 million Warner Bros. shares outstanding. Do we think a significant enough number of WBD shareholders are going to jump through the aforementioned hoops to take a deal valued at $30 over a deal potentially valued at $31 or $32? And that doesn’t even factor in the multibillion-dollar breakup fees that would come with backing out of the Warner Bros.-Netflix deal first.

Unless Paramount comes back to the table, the only thing I can envision that would jeopardize Netflix’s win here is a Trump regulatory challenge. That’s pretty unlikely.

But hey, stranger things have happened.

Max Knoblauch20h

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

Millie Giles6/11/26

JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”