Kevin Mayer Predicts the ‘Price Is Going to Go Higher’ in Paramount-Netflix Bidding War for Warner Bros. Discovery

Candle Media co-CEO and former Disney executive Kevin Mayer anticipates that Paramount will continue to raise its hostile takeover bid for Warner Bros. Discovery.

The executive would know, having been involved in every step of Disney’s $71.3 billion acquisition of Fox. Mayer served as the company’s chief strategy officer at the time, as Disney entered a bidding war with Comcast and ultimately won.

Now that Warner Bros. Discovery is up for sale, Mayer foresees that Paramount and the Ellison family will not be backing down any time soon.

“I would be very surprised if we don’t see a sweetened and perhaps meaningfully sweetened offer during this process,” he said during a Tuesday panel at a UBS conference. “I think David Ellison has already hinted at that, that he hasn’t done his best and final yet, and I suspect he hasn’t. So I think we’re in for more fireworks here.”

WBD accepted Netflix’s bid for the company last Thursday. In the days since, Paramount has gone straight to shareholders with its hostile takeover bid for $30 a share, an offer valued at $108 billion. WBD CEO David Zaslav signed a deal with Netflix for $27.75 in cash valued at $82.7 billion.

“From the Warner Bros. Discovery perspective, this is nothing but good news, the price is going to go higher,” Mayer said. “The team at Paramount is aggressive. David and Larry Ellison have got a huge amount of money for sure, and I don’t think there is a huge amount of hesitancy to spend it. I think they see a nice outcome at the end if they are able to prevail.”

The Ellison family took control of Paramount Global over the summer, merging with David Ellison’s Skydance Media. The Trump administration approved the merger in July.

Looking towards a future where Warner Bros. is lumped into another entertainment giant, Mayer said that the industry will certainly shrink. The executive currently serves as a seller in the market with companies like Hello Sunshine and Moonbug.

“There will be fewer competitors, a smaller industry with probably reduced output of creative content,” he said. “To the extent that we have fewer opportunities for revenue, operating costs and programming costs have to decline.”

Mayer suggested that Netflix’s primary interest is in Warner Bros’ film and TV studios, rather than HBO Max, though of course they would leverage it were they to buy it. The executive implied that Netflix might be willing to make concessions on streaming to get the deal done.

“If you want to really nail down these franchises and have them at your disposal for the long-term, and Warner Bros. aside from Disney is the second best studio I think, with those franchises in place, it just makes a lot of sense,” Mayer said. “It gives you access on a permanent basis on an advantaged basis to content that would otherwise be more competitive and more difficult and uncertain to have access to.”

As he weighed the offers, the executive found them “roughly equal,” depending on the valuation one puts on the cable networks company that WBD would spin off to shareholders in the case of a Netflix deal. He added that there is “industrial logic” for both deals.

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