[Author’s Note: There was a vibrant discussion and feedback on my LinkedIn post about my essay. I recommend reading the responses.]
Paramount Skydance (PSKY) responded to Netflix’s bid by launching a hostile takeover for big Warner Bros. Discovery (WBD) shareholders with an all-cash, $30-per-share offer, or $108.4 billion. Both bids have revealed that Netflix has no strategic alternatives. The bidding war is exposing three failures Netflix could previously hide: growth exhaustion (ran out of organic paths), innovation failure (gaming did not deliver) and strategic paralysis (too big to pivot).
Why is PSKY now offering $30+ per share—matching WBD’s original asking price— after previously bidding only $23? Because Netflix’s bid freezes PSKY’s options for at least a year, forcing PSKY to match WBD’s asking price now or risk losing access to the last major IP library on the market.
