Activist investor Ancora Holdings Group has called on the board of Warner Bros. Discovery to reject Netflix’s proposed takeover and re-engage with a rival approach from Paramount Skydance, intensifying a high-stakes battle over the future of one of Hollywood’s largest studios and streaming operators.
In a letter to directors, Ancora argued that Netflix’s agreed transaction, valued at about $82.7 billion on an enterprise basis, undervalues Warner Bros. Discovery’s film library, premium television assets and global sports rights. The hedge fund urged the board to reconsider a competing proposal led by Paramount Skydance, contending that it offers stronger long-term upside and fewer regulatory complications.
Warner Bros. Discovery confirmed earlier that it had reached a definitive agreement to be acquired by Netflix in a deal that would combine the owner of HBO and the Warner Bros. studio with the world’s largest streaming platform. The transaction, expected to close subject to shareholder and regulatory approvals, would reshape the media landscape by bringing together franchises ranging from DC Comics and Harry Potter to Stranger Things and Squid Game under one corporate umbrella.
Ancora, which has built a position in Warner Bros. Discovery over the past year, said the board had a fiduciary duty to test alternative bids more thoroughly. The investor claimed that Paramount Skydance’s interest, backed by Skydance Media founder David Ellison and supported by private equity partners, merits deeper engagement given its strategic alignment in film production and distribution. Ancora also suggested that a merger with Paramount Skydance could preserve greater optionality for Warner’s streaming service, Max, rather than subsuming it into Netflix’s platform.
Netflix, led by co-chief executives Ted Sarandos and Greg Peters, has presented the acquisition as a transformative step that would accelerate content investment and global scale. The company has argued that combining its data-driven distribution model with Warner’s established intellectual property would unlock synergies across theatrical releases, streaming, gaming and consumer products. Executives have signalled that cost savings and cross-promotion could enhance profitability in a market where subscriber growth has slowed and competition remains intense.
Shares of Warner Bros. Discovery rose sharply after the Netflix agreement was announced, reflecting investor expectations of a premium. However, some analysts have noted that consolidation at this scale will face scrutiny from US and international regulators concerned about market concentration in streaming and content licensing. Combining two of the most significant streaming libraries could prompt questions about pricing power, advertising markets and bargaining leverage with creators.
Paramount Skydance, which has been pursuing its own restructuring following months of negotiations with controlling shareholder Shari Redstone, is seeking to expand its production footprint and intellectual property catalogue. A tie-up with Warner would create a formidable rival to Netflix and Disney, blending Paramount’s CBS network, Paramount Pictures and streaming service with Warner’s HBO, CNN and film studios. Yet financing such a deal would likely require substantial debt and equity commitments, and the structure of any offer has not been publicly detailed.
Ancora’s intervention reflects a broader trend of activist investors targeting legacy media companies amid structural upheaval. Traditional studios have struggled with declining cable revenues, volatile advertising markets and the high cost of producing premium streaming content. Warner Bros. Discovery, formed from the 2022 merger of WarnerMedia and Discovery, has been working to reduce debt while integrating its businesses and rebranding its streaming platform as Max. Chief executive David Zaslav has emphasised disciplined spending and a renewed focus on theatrical releases to bolster cash flow.
Critics of the Netflix transaction argue that Warner’s turnaround is still in progress and that selling at this juncture could crystallise value before strategic initiatives fully bear fruit. Supporters counter that scale is increasingly decisive, with global content budgets running into tens of billions of dollars annually and subscriber growth concentrated in emerging markets where competition is fierce. They note that Netflix’s international reach and established technology infrastructure could provide Warner’s franchises with broader exposure.
Regulatory risk remains a central uncertainty. Antitrust authorities in the United States and the European Union have adopted a more assertive stance towards large technology and media mergers. While streaming remains a fragmented sector with multiple players, the combination of two major platforms would reduce the number of independent content buyers and could alter negotiating dynamics with talent and producers. Observers expect any review to examine overlaps in advertising-supported streaming, sports rights and distribution agreements.
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