Paramount’s hunt for WBD made Zaslav richer — and may not be over
Paramount Skydance CEO David Ellison speaks at the Bloomberg Screentime conference on October 9, 2025 in Los Angeles. (Photo: Patrick T. Fallon / AFP) (Photo: PATRICK T. FALLON/AFP via Getty Images)
Patrick T. Fallon | Afp | Getty Images
This isn’t exactly what David Ellison had planned back in September.
Just a few months ago, Paramount Skydance Letter sent to CEO Warner Bros. Discovery The board argued that the combination of the two media and entertainment companies made sense. This letter was the first of several letters offering increasingly higher prices to buy the company and presenting arguments as to why the assets were better together.
Paramount’s interest spurred a formal sales process. comcast And netflix This is Warner Bros. Discovery doubled the value of its shares, resulting in it losing the bidding war that Paramount had started, at least for now.
On Friday, Netflix, HBO Max and the famous Warner Bros. announced an agreement to acquire the movie studio for $27.75 per share, or an equity value of $72 billion. WBD will move forward with a plan to spin off pay TV networks like CNN and TNT Sports before the deal is finalized.
Instead of empowering Paramount just a few months after gaining control of the company through a merger with Skydance, Ellison effectively handed over a crown jewel of the media and entertainment industry to its most dominant player, thereby strengthening Netflix’s reach and saving Paramount and Comcast’s NBCUniversal from an obvious merger target.
“It wasn’t for sale before, and they certainly hadn’t cleaned up the assets or separated the assets like they are now,” Netflix co-CEO Ted Sarandos said in a conference call after announcing the deal Friday morning. “I guess this goes back to the question of ‘why now?’”
Ellison, Warner Bros. He jump-started a process that made Discovery CEO David Zaslav, WBD’s management team, and shareholders a lot of money.
Zaslav’s share
Zaslav is currently working with Warner Bros. He owns more than 4.2 million shares of Discovery and has another 6.2 million shares to be delivered to him in the future through previously granted stock awards, according to Equilar. Zaslav also has approximately 20.9 million option grants with a strike price of $10.16, Equilar found.
Based on the Netflix-WBD transaction price of $27.75 per share, this all adds up to more than $554 million for the WBD CEO.
Factoring in another 4 million shares that Zaslav is expected to receive in January, the actual total is closer to $660 million, according to a person close to the situation who spoke about the executive’s holdings and asked not to be named.
For shareholders, the sale process brought a similar unexpected outcome. Warner Bros. Discovery shares closed at $12.54 on Sept. 10, a day before The Wall Street Journal reported that Paramount was preparing an offer for the company.
On Friday morning, Warner Bros. Discovery shares rose nearly 3% to more than $25 a piece. This is Warner Bros. Discovery’s unaffected sale process is more than double its price and represents a return to 2022 levels when WarnerMedia and Discovery first merged.
It’s a testament to the vindication of Zaslav, who has been under fire for nearly four years from Hollywood and investors for failing to deliver to his shareholders. With Friday’s announcement, he effectively rescued victory from the jaws of defeat.
And yet Paramount’s Warner Bros. The quest to buy all of Discovery is probably not over.
Paramount’s hostile play
Since the merger was completed in August, Paramount has added top executives and high-profile Hollywood talent like the Duffer Brothers. It has secured the rights to develop a live-action feature film based on Activision’s Call of Duty video game franchise and signed a $7.7 billion deal for UFC rights.
Ellison’s Warner Bros. The search for Discovery was his biggest effort since taking control of the company.
Paramount’s lawyers filed a lawsuit against Warner Bros. this week. He sent a letter to Discovery, first reported by CNBC, alleging that the sales process was rigged at Netflix’s direction. Paramount, Warner Bros. He accused Discovery of not properly considering its $30 all-cash offer and instead selling to Netflix as a foregone conclusion.
Netflix made an initial offer of $27 per share for WBD’s studio and streaming assets, according to a source familiar with the matter. This overshadowed Paramount’s offer at the time and turned the tide of sales talks in Netflix’s direction, said the person, who asked not to be named because the talks were private.
Paramount was the only bidder interested in purchasing all of WBD’s assets (movie studio, streaming service and TV networks). His offer is claimed to be superior.
Paramount’s executives and advisors valued the Discovery Global networks portfolio at close to $2 per share, based on an estimated trading multiple and estimated leverage, according to people familiar with the matter who asked not to be identified because the discussions are private.
Warner Bros., according to others with direct knowledge of the matter. Discovery believes Discovery Global could be worth $3 per share or more if it trades well on public markets.
Paramount also argued that it was tax efficient for shareholders to buy the entire company rather than just part of it, and that Netflix’s offer introduced higher regulatory risk. The Trump administration’s view of the proposed combination is “heavy skepticism,” CNBC reported Friday.
According to sources familiar, Paramount has offered a $5 billion breakup fee if the proposed deal does not receive regulatory approval.
Netflix’s offer included a $5.8 billion breakup fee if the deal didn’t receive regulatory approval, according to a Securities and Exchange Commission filing Friday.
Paramount is now weighing its options on whether to go directly to shareholders with a better offer; perhaps an even higher offer than the $30 per share, all-cash offer he made to WBD this week.
If so, Netflix will have a chance to match the offer. The end result will mean more money for WBD shareholders and more money for Zaslav.
— CNBC’s Nick Wells contributed to this report.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become CNBC’s new parent company, based on Comcast’s planned Versant spinoff.
