The Streaming Wars Just Entered a New Phase. Here's What Paramount vs.

Core Viewpoint - The competition for Warner Bros. Discovery's assets is intensifying between Netflix and Paramount Skydance, highlighting the high stakes in the streaming industry consolidation phase [1][2]. Netflix Acquisition Details - Netflix's proposed acquisition values Warner Bros. Discovery at $27.75 per share, with an enterprise value of $82.7 billion, offering $23.25 in cash and $4.50 in Netflix stock for each share [4]. - The deal includes a collar mechanism that affects the amount of Netflix stock shareholders will receive, depending on the stock's price prior to closing [5]. - The acquisition is expected to take 12 to 18 months to finalize, during which Warner Bros. Discovery plans to split into two publicly traded companies: Warner Bros. and Discovery Global [6][7]. Paramount Skydance's Offer - Paramount's offer has an enterprise value of $108.4 billion, proposing $30 per share in an all-cash deal that includes the entire Warner Bros. Discovery company [8][9]. - Paramount's bid avoids the uncertainties associated with Netflix's collar and suggests that Discovery Global may only be worth about $1 per share due to its debt [9]. - Paramount argues that Netflix's acquisition may face significant regulatory scrutiny, potentially blocking the deal [10]. Stock Valuation and Market Implications - The stock valuations of Netflix and Paramount have fluctuated, with both experiencing a drop in their price-to-sales ratios, while Warner Bros. Discovery's ratio has increased due to the bidding war [13][15]. - For Warner Bros. Discovery shareholders, the stock has gained 179% in 2025, making it a favorable time to sell amid the uncertainty of the acquisition outcome [16]. - If Netflix successfully acquires Warner Bros. Discovery, it would solidify its position as a dominant player in the entertainment sector, while Paramount's success could enhance its streaming capabilities [17][18]. Investment Outlook - Despite the ongoing acquisition battle, Netflix is viewed as the superior stock option currently, given its leadership in the streaming industry [19].