Netflix’s Peters says Paramount’s WBD offer ‘doesn’t pass sniff test’

Netflix co-chief exec Greg Peters has said Paramount’s bid to wrestle control of Warner Bros Discovery “doesn’t pass the sniff test”, as the battle for the HBO owner continues. 

Peters’ comments to the Financial Times mark the latest ratcheting up of tensions between the companies, after Paramount last week extended the deadline for its offer to be taken up by shareholders to 21 February. 

Paramount, led by chief exec David Ellison and multi billionaire father Larry, is looking to muscle in on Netflix’s $83bn deal agreed with WBD, which includes the latter’s streaming and studio. 

Paramount, by contrast, is looking to acquire the entire company including its cable channels - which would otherwise be spun off into a new entity - for $108bn, but Peters said he had seen few signs that shareholders were favouring the Ellisons’ proposal. 

He highlighted Netflix’s considerably larger size (market cap of $395bn versus Paramount’s $13bn), arguing that the Ellisons’ deal would not be possible without Larry’s vast wealth, estimated to be around $230bn. 

“Without Larry Ellison independently financing this thing, there’s no chance in hell Paramount would ever be able to pull this off,” Peters told the FT. 

He also described the structure of Paramount’s deal, which would require it to take on more debt in addition to a $40bn backstop from Larry Ellison, as “pretty crazy”. 

Paramount has declined to increase its $30-per-share bid and Peters argued that any move higher would require even greater leverage. “It’s hard to imagine how that works out well,” he said. 

Peters said the Paramount bid did not “pass the sniff test, in my mind”, adding that the WBD board agreed. 

In his interview with the FT, Peters said that he believed only a “very small” number of shareholders supported Paramount’s hostile bid, with regulatory filings suggesting that around 170 million of 2.45 billion shares had been tendered. 

Gerry Cardinale, founder of Paramount Skydance backer RedBird Capital, dismissed Peter’s comments, adding: “Our leverage is nowhere near what they’re talking about. The Netflix deal is the Harry Houdini of deals.”