Paramount chair and CEO David Ellison is taking his bid for TNT Sports parent company Warner Bros. Discovery directly to shareholders, and it’s quickly getting emotional.
On the heels of the hostile bid for WBD by the CBS Sports parent company, tendered earlier this week, Ellison sent a lengthy letter to WBD shareholders imploring them to sell their stock. The missive, running for more than 2,000 words, is replete with bolded and capitalized words and frequently takes aim at WBD’s definitive $82.7 billion agreement to sell its studio and streaming businesses to Netflix.
“It is not too late to realize the benefits of Paramount’s proposal if you choose to act now and tender your shares,” Ellison wrote in all capital and bolded letters.
The letter also notes what he calls “WBD’s murky sales process,” and he insists that Paramount’s all-cash tender offer, carrying an enterprise value of $108.4 billion for WBD, is entirely solid. That financial backing includes RedBird Capital Partners, several foreign sovereign wealth funds, and Affinity Partners, an investment firm led by Jared Kushner, son-in-law of U.S. President Donald Trump.
“To suggest we are not ‘good for the money’ (or might commit fraud to try to escape our obligations, as certain reports have speculated), is absurd,” Ellison wrote in another bolded section.
Ellison’s outreach marks the latest and one of the more dramatic turns in a saga that has roiled the entire U.S. media business for months. The fate of TNT Sports hangs in the balance, as Netflix does not want the part of WBD that will become Discovery Global and house those sports assets. Paramount, conversely, is seeking to acquire all of WBD and would merge CBS Sports with TNT Sports to create a sports media colossus spanning numerous platforms.
Politics, however, will direct much of the future of WBD Sports. Trump—and by extension the Federal Communications Commission run by Trump ally Brendan Carr—will have a heavy hand in the forthcoming regulatory review process. Most recently, Trump is pushing for WBD to sell CNN, a network the president has long hated. In the current, planned deal with Netflix, CNN would stay with Discovery Global.
“I think CNN should be sold, because I think the people that are running CNN right now are either corrupt or incompetent,” Trump said Wednesday. “I think any deal should be guaranteed and certain that CNN is part of it or sold separately.”
Paramount set a Jan. 8 deadline for WBD stockholders to tender their shares, but that timetable could be extended.
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Netflix, meanwhile, has seen its shares fall noticeably since last Friday’s announcement of its deal with WBD. Since then, shares have dropped more than 9%, including a fall of more than 4% on Wednesday alone. The bid from Netflix includes a sizable amount of debt financing, with the WBD potentially raising the company’s total debt from about $15 billion to roughly $75 billion.
The company, however, remains consistently profitable, generating $2.5 billion in net income in its last quarter. Some analysts have opined that the potential financial risks of a deal with WBD are manageable, but the market still shows some uncertainty surrounding that sentiment. Earlier in its history, Netflix was derisively known as “Debtflix” as it borrowed heavily to build up its content library.
“We believe this very expensive deal highlights Netflix management’s concern that short-form entertainment (TikTok, Instagram, X, YouTube shorts, and Snap) is doing to streaming what streaming has done to traditional TV,” wrote Pivotal Research Group analyst Jeffrey Wlodarczak, a longtime advocate of Netflix.
Editors’ note: RedBird IMI, in which RedBird Capital Partners is a joint venture partner, is the primary investor in Front Office Sports.
