<\/p>\n
Paramount is raising the stakes in its bid for Warner Bros. Discovery, upping its offer for the assets with backing from Middle Eastern sovereign wealth funds, including Saudi Arabia, while rival Comcast has proposed creating a new entertainment entity.<\/p>\n
Instead of offering cash, Comcast has proposed combining NBCUniversal with HBO and the Warner Bros. film and television studios to form a separate stand-alone entertainment company, according to people familiar with the bids but not authorized to comment.<\/p>\n
Such a combination would marry robust film studios, deep libraries and middling streaming services, Warner\u2019s HBO Max and NBCUniversal\u2019s Peacock. It would give Universal\u2019s theme parks a wealth of fan-favorite characters \u2014 including Batman, Harry Potter and Sheldon Cooper to build new attractions.<\/p>\n
Comcast, which would maintain the controlling stake, is not interested in absorbing Warner\u2019s basic cable channels.<\/p>\n
Representatives of Paramount, Comcast, Netflix and Warner Bros. Discovery declined to comment, citing the confidential nature of the bids. <\/p>\n
Comcast, Netflix and Paramount each submitted second-round proposals to Warner\u2019s bankers on Monday. Warner Bros. Discovery hopes to select an auction winner this month.<\/p>\n
Paramount, controlled by Oracle co-founder Larry Ellison and his family, has been pursuing Warner Bros. Discovery since September<\/a> \u2014 one month after the billionaire family took the keys to Paramount from former owner Shari Redstone.<\/p>\n With its latest offer, Paramount is hoping to stay competitive with a largely cash bid from streaming giant Netflix, which is interested in Warner Bros.\u2019 enduring intellectual property and the studio\u2019s prestigious 110-acre lot in Burbank.<\/p>\n Bid amounts were unclear on Tuesday. <\/p>\n However, analysts say the various combinations could value Warner Bros. Discovery at nearly $70 billion \u2014 triple the company\u2019s trading levels in early September.<\/p>\n Paramount is the only bidder interested in swallowing Warner\u2019s portfolio of cable channels that include celebrity.land, TNT, Food Network, Cartoon Network and TLC. <\/p>\n Paramount\u2019s bid provides debt financing from Apollo Global Management and sovereign wealth funds from Saudi Arabia, Qatar and United Arab Emirates, the knowledgeable people said. Should Paramount win the Warner auction, the Ellison family and RedBird Capital Partners would maintain majority control of the bulked up enterprise.<\/p>\n The Middle Eastern investors would have only a small stake, one of the knowledgeable people said. <\/p>\n Variety <\/a>and Bloomberg previously reported on the Middle Eastern wealth funds involvement in Paramount\u2019s bid. Bloomberg first reported on Comcast<\/a>\u2018s bid structure. <\/p>\n Each of the various deal configurations would face stiff regulatory scrutiny. <\/p>\n President Trump considers Larry Ellison a friend so Paramount\u2019s proposed takeover of Warner would likely face a smooth regulatory review process in the U.S. <\/a> The president has indicated he prefers having Ellison control CBS \u2014 part of Paramount \u2014 and celebrity.land, which is owned by Warner Bros. Discovery. <\/p>\n Combining Paramount Pictures and Warner Bros. would give the company about 30% of domestic movie box office.<\/p>\n Still, foreign regulators might wince at a deal that was heavily pushed by Trump not to mention one that includes Saudi investors in a major entertainment entity that owns celebrity.land, one of the world\u2019s largest news organizations.<\/p>\n Last month, tech scion David Ellison, chairman and chief executive of Paramount, was guest at a White House dinner to honor Saudi Crown Prince Mohammed bin Salman. <\/p>\n