Netflix has sweetened its offer for Warner Bros. Discovery in a second round of bids as it tries to outdo rival Paramount.
The streamer on Monday made a primarily cash-based second offer for the entertainment and streaming assets of Warner Discovery and is working to secure tens of billions in financing to fund the purchase, people familiar with the matter said.
Paramount also made an improved offer for all of Warner Discovery, including its collection of cable networks like CNN and TNT, some of the people said.
Comcast Corp., parent of NBCUniversal, has submitted a second bid for the entertainment assets as well, a person with knowledge of that situation said. Like Netflix, Comcast is interested in the studios and streaming service, not the cable channels.
The terms of Paramount and Comcast’s new offers couldn’t be learned.
It is unclear whether there will be another round of bids. The parties are now waiting to hear back from Warner Discovery.
Warner Discovery essentially put itself up for sale in October after receiving several unsolicited offers from Paramount, which Warner Discovery rebuffed. Paramount is run by CEO David Ellison. Ellison’s family, including his billionaire father Larry Ellison, is backing the bid with help from private-equity firm RedBird Capital Partners.
Warner Discovery has indicated it would like to wrap up its auction process by around Christmas. It is also continuing with plans to split itself into two separate companies, one comprising the studio and streaming assets and the other containing its global cable network operations.
A potential acquisition by Netflix of the Warner Bros. TV and movie studios, their vast libraries of content and the HBO Max streaming service may face tough scrutiny from lawmakers and regulators.
Some officials at the Justice Department are concerned that Netflix owning HBO Max would give it too much power in the streaming marketplace, a person familiar with their thinking said. The department’s antitrust division, which is responsible for reviewing deals, hasn’t formally evaluated a potential transaction.
There was also a recent meeting of high-level White House officials in which concerns about a Netflix-Warner Discovery deal were discussed, according to people familiar with the matter.
The New York Post previously reported on the White House meeting. Bloomberg reported on the details of Netflix’s latest bid.
Netflix is the biggest subscription streaming service in the U.S. However, it is sixth in total TV usage ranked by parent company, coming in behind Google’s YouTube, Comcast, Paramount and others, according to Nielsen.
Other suitors could also face scrutiny. Paramount and Comcast already own large movie and television production units and either one combining with Warner Discovery would create a behemoth that would be of concern to the creative community, analysts have said.
A Paramount-Warner Discovery combination would put many cable networks under one roof. Paramount’s holdings include MTV, Comedy Central and Nickelodeon, while Warner Discovery channels include TBS, TNT and Food Network.
Additionally, a merger involving Warner Discovery’s CNN news platform and Paramount’s CBS News could raise alarm bells with media critics worried about industry consolidation.
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