Even as Warner Bros. Discovery CEO David Zaslav appeared bent on closing a mega deal with Netflix, his real plan was to reignite an Ali-Frazier-style bidding war for his company, On The Money has learned.
“I wanted to put these guys in the ring together and let them duke it out,” the mercurial media mogul told one person close to the matter. “And it’s good for shareholders.”
The “guys” he’s referring to are, of course, Netflix – which had appeared to win the monthslong bidding war for WBD’s studio and streamer – and Paramount Skydance, which has launched a hostile bid to upend the deal.
A person close to Zaslav tells On The Money that the CEO had long been setting the stage for Tuesday’s announcement that he is now offering Paramount Skydance, also known as PSKY, a chance to come in and negotiate with him with their “best and final offer.”
He did that by keeping the lines of communication open with PSKYs chief David Ellison and his mega billionaire father Larry Ellison, who is bankrolling the company’s bid.
That’s despite outward signs of hostility between both camps, with Zaslav barreling toward a shareholder vote to approve Netflix’s $27.75 a share offer for his studio and streaming service, a $73 billion deal his board approved over what PSKY put on the table.
PSKY went “hostile” by appealing to shareholders with its tender to take over the whole company. At times, the mood in the board room seemed contentious; PSKY even sued Zas & Co., saying they unfairly favored Netflix because of Zas was friends with Netflix chief Ted Sarandos.
Maybe, but more quietly WBD bankers were holding backdoor talks with the Ellisons — suggesting how much Zas respected both including their partners at RedBird Capital and was open for a deal. That’s when PSKY indicated they would sweeten their offer for the whole company to at least $31 a share from $30, pushing the price tag to above $80 billion.
Not bad considering when the bidding war started back in September of last year, WBD traded at around $12 and David Ellison’s first bid was a $19 cash and stock offering.
A spokeswoman for the Ellisons had no immediate comment on whether they will take Zas up on his offer, but the betting on Wall Street and in the media world is they will. A spokesman for WBD declined to comment beyond the announcement.
Zas, as he is widely known in the media circles, is a veteran media executive who clawed his way to the top of the industry after stints at NBC universal, the Discovery, which he engineered into owning Warner Media after AT&T got tired of its foray into cable and programming and spun out the properties in a deal announced in 2021.
After a slow start and a flagging stock price, by 2025 he had begun to rebuild WBD into a serious media company. He slashed debt, retrofitting his streaming service HBO Max into a profitable and third most popular of this conduit for entertainment. The Warner studios began to churn out hit after hit. His cable properties like CNN were still significantly profitable even in the era of cord cutting.
As The Post first reported, after Ellison made his first bid, Zas sought out other potential bidders and they began lining up: Amazon, Apple, Comcast and Netflix, the streaming giant, all began to compete with PSKY and his price moved ever higher. The bidding war in late December came down to two: Netflix and PSKY, and then seemingly one, Netflix, which his board approved for a shareholder vote to be held in a few weeks.
David Ellison is no dummy, however, neither is his dad, nor his partners at RedBird Capital, run by one of Wall Street’s best dealmakers, Gerry Cardinale. They saw some pitfalls in the Netflix bid, structurally and from a regulatory standpoint. Investors needed to roll the dice on a separate sale of the cable properties to put it above its $30 offer, which given the debt on their balance sheet might not sell for more than $1.
More existential: Layering Netflix’s No. 1 studio and No. 3 streaming services will have to get past through a skeptical DOJ antitrust department. President Trump is friends with Larry Ellison, an early MAGA supporter, and has vowed to be involved in the deal to make sure that among other things CNN, a Trump critic, is put into friendlier hands.
In recent weeks the regulatory push back became intense, as The Post reported with Netflix’s entire business model coming under scrutiny for possibly being a streaming monopoly. That had Zaslav back to weighing reopening the bidding process – and getting more money out of both Netflix and PSKY.
Recall, Ellison purchased Paramount, the media company created by deceased dealmaker Sumner Redstone, last year nearly as a distressed sale. It had marquee media properties like CBS but they were hemorrhaging money. Its streaming service was nowhere, studio middling at best, so the Ellison’s needed what WBD had and they still do.
Zas, I am told, expects PSKY to come in shortly and fully utilize its seven-day window for its best and final offer. The Post has reported in the past that the PSKY team had discussed bidding as high as an additional $3 a share, but under the terms of the deal with Netflix, the streaming giant can match, which is exactly what Zas wants.
Netflix could walk away but it too is looking to enhance its business model with a real studio and support its streaming reach, and might be willing to fight the government later as it fights PSKY now for WBD.
“You’re a maestro,” one large investor said Tuesday morning when he read the announcement. To which Zaslav is said to have responded: “I never thought I would ever be compared to Leonard Bernstein.”
