How Larry Ellison can get Warner to play ball
The billionaire Ellison family said this week that it would vote with the board of Warner Bros Discovery Inc. unless the Hollywood studio engages with their $108 billion takeover bid. But winning support in a corporate fight won’t be easy.
Sure, the Ellisons are leading rival suitor Netflix Inc. once. Paramount Skydance Corp., the studio backed by tech luminary Larry Ellison and led by his son David Ellison’s 30 per share for the whole of Warner. That’s attractive compared with Netflix’s recent stock and streaming arms getting sold for a targeted $27.5bn in cash and stock, and shareholders keep a cable-TV business whose value may not cover the shortfall versus Paramount’s pitch.
But there’s a snag with Paramount. What happens if a deal is agreed with the Ellisons? Those Warner assets that finance could collapse, resulting in a lot of wasted time and money. The reasoning is that a Paramount takeover would ensure Warner’s crown jewel – HBO – goes into the hands of Ellison’s other media assets, Comcast’s NBCUniversal and Netflix. That could attract antitrust challenges combined with the Paramount–Warner merger looks less scary. Paramount has cash on hand, a powerful streaming asset in Paramount+, and half a Hollywood film library worth billions. And a half-years. Giving full credit for these savings from day one would overpromise, but it seems fair to allow for some benefit. Plus there’s $4.5bn in Ellison-backed equity in this proposal. That’s a huge cushion.
Warner is, however, more convincing when assessing how bad the fallout would be from either deal. If the Netflix transaction gets blocked, Warner just reverts to its pre-deal strategy of being a streaming and streaming business having spun off its cable TV arm, Global Networks. Netflix doesn’t want a cable TV business. Paramount wants the whole of Warner, so the Global Networks separation would be part of the Paramount takeover. It would have to repeat the spin-off plan. That could take months, adding to the delay from pursuing the failed merger. Meanwhile, Warner would rack up an extra $3.2bn in break fee to Netflix for switching sides, plus potentially $7bn planned debt refinancing for the cable carve-out doesn’t happen. Through expenses and most of the $5.8bn break fee Paramount has offered instead to upend Netflix would be used up, leaving only $1.1bn, Warner says. That’s small compensation for the setback to its business in this scenario.
As things stand, the Ellisons don’t need to raise their bid. Netflix falling apart has dragged the value of its agreed deal slightly more than $27.3bn, excluding cable. It is considering spinning off Global Networks. Bloomberg Intelligence expects the net value of that plan, the overall attractiveness of the Netflix deal, depends on the value of Global Networks, and that’s not been helped by the weak stock market debut of Comcast Corp.’s cable-TV business, Versant Media Group.
Paramount’s threats of a boardroom reset and litigation to get Warner to reveal its internal deliberations risk being counterproductive. Warner’s objections relate to the cost of the deal being accretive. A bid and a makeover has shareholders backing the Ellisons’ hostile contest. Rather, a solution that has a higher chance of clearing political and regulatory hurdles if they get an agreement with their target.
The Ellisons could add a bit more equity into the mix to ease the debt concern. Above all, they’d be well advised to devise a framework for managing the Global Networks spin-off that puts both sides, while improving or restructuring the break fee. Do this, and it’ll remove any excuse for Warner not engaging.
1. Core Issue — This Is Not About Price
The headline fact is misleading if read superficially.
The Ellison family’s $108 billion bid for Warner Bros. Discovery is not being resisted because it is too low.
It is being resisted because:
It introduces execution risk
It magnifies regulatory exposure
It destabilises Warner’s ongoing restructuring
It leaves Warner worse off if the deal collapses
In M&A, certainty beats generosity. Right now, the Ellison bid lacks certainty.
2. Competing Deals — Why Warner Prefers the Devil It Knows
Warner is already aligned with Netflix on a transaction that:
Values the streaming assets at ~$27.3–27.5 billion
Spins off the declining cable-TV unit (Global Networks)
Leaves Warner with a clean, focused streaming future
If the Netflix deal fails:
Warner simply reverts to its existing strategy
No forced recomposition of the business
No additional regulatory entanglements
That fallback option is crucial.
The Ellison-backed Paramount Skydance bid does not offer a safe fallback.
3. The Paramount Problem — Too Much Goes Wrong If It Fails
Here is the Ellison bid’s fatal flaw: failure is catastrophic.
If Warner abandons Netflix and backs Paramount instead:
Immediate costs:
$3.2 billion payable to Netflix as a break fee
Loss of the planned $7 billion debt refinancing tied to the Global Networks carve-out
Months of wasted time re-planning a spin-off that Netflix didn’t want but Paramount would require
Net outcome if Paramount collapses:
Break fees mostly consumed
Only $1.1 billion left as compensation (per Warner)
Business momentum damaged
Management credibility weakened
From Warner’s board perspective, that is asymmetric downside risk.
4. Antitrust Reality — HBO Is the Real Landmine
The editorial is correct to flag HBO as the crown jewel — and the liability.
A Paramount-Ellison takeover risks HBO ending up alongside:
NBCUniversal
Netflix (directly or indirectly)
That configuration:
Raises horizontal and vertical integration concerns
Invites DOJ and FTC scrutiny
Looks like content consolidation, not rationalisation
By contrast:
Netflix buying streaming assets without cable is simpler
The Paramount-Warner tie-up is regulator-bait
Boards do not gamble on antitrust optimism. They price in delays, remedies, or outright rejection.
5. Ellison Leverage — Why Hostility Won’t Work
The Ellisons’ threat to:
Vote against the board
Launch litigation
Force disclosure of internal deliberations
…is strategically counterproductive.
Why?
Warner’s objections are economic and structural, not procedural
Litigation slows the clock — it does not fix deal accretion
A hostile posture hardens management resistance
Regulators view hostile mega-media deals with extra suspicion
This is not Silicon Valley.
Hollywood boards respond to risk reduction, not pressure theatrics.
6. What Actually Needs Fixing (Actionable, Not Rhetorical)
If the Ellisons want Warner to engage seriously, four things must change — concretely.
1️⃣ Increase Equity, Not Price
Debt is Warner’s pressure point.
Add more Ellison-backed equity beyond the current $4.5 billion to:
Reduce leverage
Improve credit optics
Make the deal accretive sooner
This matters more than headline valuation.
2️⃣ De-Risk the Global Networks Spin-off
Warner fears chaos if Paramount takes over.
The Ellisons must:
Present a fully sequenced, time-bound carve-out plan
Guarantee financing continuity during separation
Remove ambiguity about cable liabilities
Right now, this is the weakest link.
3️⃣ Fix the Break-Fee Asymmetry
Warner’s downside exposure is unacceptable.
A credible bid must:
Increase the reverse break fee
Ensure Warner is better off, not worse, if regulators intervene
Compensate for lost refinancing and time value
Without this, no rational board switches horses.
4️⃣ Signal Regulatory Seriousness
Publicly and structurally:
Ring-fence HBO governance
Offer behavioural remedies up front
Avoid asset stacking that screams consolidation
Antitrust risk must be designed out, not argued away.
7. The Irony — Warner Shareholders Are Already Leaning Ellison
The editorial’s quiet insight is critical:
A bid and makeover has shareholders backing the Ellisons’ hostile contest.
That means:
Sentiment is not the problem
Credibility is
The board is not defending Netflix out of loyalty.
It is defending business continuity.
8. Bottom Line — How Ellison Actually “Gets Warner to Play Ball”
Not by:
Threats
Lawsuits
Boardroom theatrics
But by:
Over-engineering certainty
Under-promising synergy
Insuring downside risk
Respecting regulatory gravity
Right now, the Ellison bid looks ambitious but brittle.
The Netflix deal looks smaller but survivable.
Boards always choose survivability.
Final Verdict
Larry Ellison does not need to bid higher.
He needs to fail safer.
Until the Paramount proposal makes Warner better off even if it fails, the board is rational to resist.
Fix the structure, not the rhetoric — and Warner will have no excuse left to ignore the call.
|
No. |
Word |
Meaning |
Synonyms (4–5) |
Antonyms (4–5) |
Hindi Meaning |
Derived Forms |
|
1 |
Takeover bid |
An offer to acquire control of a company |
acquisition offer, buyout bid, purchase proposal, takeover attempt |
divestment, sell-off, exit, withdrawal |
अधिग्रहण प्रस्ताव |
take over |
|
2 |
Engages |
Actively involves or interacts with |
interacts, participates, negotiates, communicates, deals |
ignores, avoids, disengages, neglects |
संलग्न होना / बातचीत करना |
engagement |
|
3 |
Corporate fight |
A conflict over control or direction of a company |
boardroom battle, power struggle, takeover contest, proxy war |
cooperation, consensus, agreement, harmony |
कॉर्पोरेट संघर्ष |
— |
|
4 |
Rival suitor |
Competing party seeking the same deal |
competitor, challenger, bidder, contender |
ally, partner, supporter |
प्रतिद्वंद्वी प्रस्तावक |
rivalry |
|
5 |
Attractive |
Appealing or favorable |
appealing, compelling, enticing, favorable, lucrative |
unattractive, unappealing, poor, undesirable |
आकर्षक |
attractiveness |
|
6 |
Shortfall |
A deficit or gap between need and availability |
deficit, gap, shortage, insufficiency, lack |
surplus, excess, abundance |
कमी / घाटा |
shortfall |
|
7 |
Snag |
An unexpected problem or obstacle |
hurdle, hitch, obstacle, complication, glitch |
solution, advantage, benefit, ease |
अड़चन / बाधा |
snagged |
|
8 |
Crown jewel |
The most valuable or important asset |
prized asset, centerpiece, flagship, key holding |
liability, burden, weak asset |
सबसे मूल्यवान संपत्ति |
— |
|
9 |
Antitrust |
Related to laws preventing monopolies |
competition law, anti-monopoly regulation, market regulation |
monopoly, cartelisation, collusion |
प्रतिस्पर्धा-विरोधी कानून |
trust |
|
10 |
Merger |
Combination of two companies |
amalgamation, consolidation, union, fusion |
split, separation, divestment |
विलय |
merge |
|
11 |
Cushion |
Financial protection against risk |
buffer, safeguard, reserve, shock absorber |
exposure, risk, vulnerability |
सुरक्षा कवच |
cushioning |
|
12 |
Fallout |
Negative consequences of an event |
repercussions, aftermath, consequences, impact |
benefit, gain, advantage |
दुष्परिणाम |
fall out |
|
13 |
Spin-off |
Separation of a business unit into a new company |
demerger, carve-out, split, separation |
merger, consolidation, integration |
अलग की गई इकाई |
spin off |
|
14 |
Rack up |
Accumulate something, usually costs or losses |
accumulate, amass, pile up, incur |
reduce, cut, eliminate, lower |
जमा हो जाना |
racked |
|
15 |
Break fee |
Penalty paid for exiting a deal |
termination fee, exit penalty, cancellation charge |
waiver, refund, incentive |
समझौता तोड़ने का जुर्माना |
break |
|
16 |
Refinancing |
Replacing existing debt with new debt |
restructuring debt, reborrowing, rollover |
repayment, liquidation, settlement |
ऋण पुनर्वित्तपोषण |
refinance |
|
17 |
Compensation |
Payment for loss or damage |
reimbursement, indemnity, restitution, payout |
loss, penalty, forfeiture |
मुआवजा |
compensate |
|
18 |
Counterproductive |
Producing the opposite of the intended effect |
self-defeating, harmful, ineffective, damaging |
effective, productive, beneficial |
उलटा नुकसानदेह |
productivity |
|
19 |
Accretive |
Increasing value or earnings |
value-enhancing, additive, beneficial, growth-oriented |
dilutive, reducing, erosive |
मूल्यवर्धक |
accretion |
|
20 |
Restructuring |
Reorganising finances or operations |
reorganisation, overhaul, realignment, reform |
stagnation, rigidity, status quo |
पुनर्गठन |
restructure |
1. What was the ratio of general government expenditure to GDP in FY25 as mentioned in the article?
A. 26.6%
B. 27.0%
C. 27.4%
D. 27.8%
E. 28.2%
2. How does the FY25 expenditure-to-GDP ratio compare with FY17?
A. Significantly higher
B. Exactly the same
C. Marginally lower
D. Sharply lower
E. Marginally higher
3. From FY13 to FY25, by how many basis points did the expenditure-to-GDP ratio increase?
A. 40 basis points
B. 60 basis points
C. 70 basis points
D. 80 basis points
E. 100 basis points
4. Which level of government mainly drove the modest rise in expenditure over this period?
A. Central government ministries
B. Public sector enterprises
C. State governments
D. Urban local bodies
E. Defence establishments
5. What broader trend does the article identify behind India’s fiscal consolidation?
A. Revenue expansion without spending cuts
B. Expanding control more than resource enhancement
C. Sharp rise in social sector spending
D. Aggressive privatisation
E. Rising defence expenditure
6. Which type of spending is said to have suffered during fiscal consolidation?
A. Defence expenditure
B. Interest payments
C. Productive social infrastructure spending
D. Administrative expenditure
E. Subsidies on fertilisers
7. What was the Centre’s budgeted total expenditure as a share of GDP for the current fiscal year?
A. 13.6%
B. 14.0%
C. 14.2%
D. 14.5%
E. 15.0%
8. What was the year-on-year growth in gross tax revenues during the current fiscal (April–November)?
A. 2.1%
B. 2.8%
C. 3.3%
D. 4.5%
E. 5.2%
9. Which factor primarily explains the slowdown in tax growth?
A. Weak corporate profits
B. Decline in customs duties
C. Deep income tax and GST cuts
D. Rising tax evasion
E. Reduction in excise duties
10. What fiscal deficit target for FY26 does the article mention?
A. 4.0% of GDP
B. 4.2% of GDP
C. 4.4% of GDP
D. 4.6% of GDP
E. 5.0% of GDP
11. How much did the Centre’s capital expenditure grow in the first eight months of the fiscal year?
A. 10.0%
B. 15.5%
C. 20.8%
D. 28.2%
E. 35.0%
12. How did States perform on capital expenditure growth during April–November?
A. Outperformed the Centre
B. Matched the Centre’s pace
C. Recorded about 10% annual growth
D. Saw a contraction
E. Achieved over 25% growth
13. According to CareEdge, what proportion of States’ budgeted capex was utilised by November-end?
A. 25.0%
B. 31.4%
C. 38.3%
D. 45.0%
E. 52.6%
14. By how many percentage points must India’s tax-to-GDP ratio rise over the next five years, according to the article?
A. 2 percentage points
B. 3 percentage points
C. 4 percentage points
D. 5 percentage points
E. 6 percentage points
15. What is the combined value of direct and indirect taxes locked in litigation, as highlighted in the article?
A. About ₹10 lakh crore
B. About ₹12 lakh crore
C. About ₹14 lakh crore
D. About ₹16.5 lakh crore
E. About ₹33 lakh crore
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