Netflix and Paramount Skydance make billion-dollar moves to acquire Warner Bros. Discovery, shaking up sports landscape

The GIST: On Friday, Netflix announced it will acquire the streaming and studio divisions of Warner Bros. Discovery (WBD), now separated under the Warner Brothers (WB) brand, in a $82.7B deal. But in dramatic fashion, Paramount Skydance threatened to finish what it started as it launched a $108.4B hostile bid for the entire company to compete with what was considered a done deal. Let’s dive in.

The acquisition: Netflix announced it was acquiring all WB IP, including its film and streaming studios and its HBO properties. That means classics like The Sopranos would be available on Netflix, as well as content from the DC Universe. However, Paramount Skydance — which has unsuccessfully bid for WBD thrice — made an aggressive play to outbid Netflix after the buzzer.

• Paramount Skydance CEO David Ellison has gone straight to WBD shareholders with an all-cash offer of $30 per share, which comes out to $108.4B for the whole enchilada. And apparently, $24B of that is sourced from three sovereign wealth funds: the UAE, Saudi Arabia, and Qatar.

The impact: Though Netflix is getting all HBO Max shows, sports content previously streamed on HBO Max, such as Unrivaled, isn’t expected to reach Netflix since sports rights remain with Discovery Global. If the Netflix deal goes through, it’s estimated shared viewership would comprise about 21% of streaming viewing compared to a combined 8% in a Paramount–WBD merger.

• Though Netflix is building its sports profile, it's been one-off live events rather than full seasons, meaning it’s missing out on padding its sports portfolio. Thanks to WBD’s internal split, it’s expected that most TNT sports media deals, including those for the College Football Playoffs and men’s March Madness will remain with Discovery Global.

• However, if Ellison’s bid wins, it is for the entire company, resulting in sports content likely migrating to CBS and Paramount+.

Zooming out: Under the Trump administration, companies are going wild with previously impossible mergers, although the president opposes Netflix’s takeover since it doesn’t favor his friend. While this is economically concerning, for women’s sports teams that have inked deals with smaller networks that are being swallowed up by larger ones, they can reach a wider audience.

• For the changeups at Ion and NBC/Versant, women’s sports leagues have been guaranteed more widespread coverage. But if leagues like Unrivaled lose their ability to stream, Discovery Global could lose its edge in sports as cable withers. For the sake of sports viewership, a Paramount Skydance deal would be better for leagues under contract with WBD. Watch this space.