The Skinny On...

Paramount vying with Netflix to buy Warner Brothers Discovery is all anyone can talk about. But there’s SO much the financial press is getting wrong — or missing altogether. We are breaking down EVERYTHING you need to know to be smart about the biggest deal of the year.

Plus, special guest writer Leanna Haakons shares her recommendations for the perfect gifts for the finance professionals you know and love! Here are her top recs you won’t find your typical TikTok influencers peddling.

— Jen & Kristen

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M&A Masterclass: When LBO meets Hostile Takeover

The bidding war over Warner Bros. Discovery (WBD) has quietly turned into the best real-time finance case study of the decade.

What started as a normal auction process has now morphed into takeover drama with a hostile bid, a valuation fight over “bad” assets, and a deal structure that looks way more like a traditional leveraged buyout than traditional public-company M&A. 

The short version is this.

 Paramount made an offer to buy WBD in September.

Instead of moving forward with that offer, WBD decided to run a formal auction process, hiring sell side bankers and getting bids from a larger group of buyers. WBD weighed offers from Netflix, Paramount, and Comcast, and ultimately chose Netflix who offered $27.75 per share.

Now, it’s important to note that Netflix and Comcast were interested in JUST two parts of WBD’s business: the streaming assets like HBO and the studio business. They were NOT looking to buy the declining linear TV / cable assets (like CNN and TBS). So, while Paramount’s bid to the board during this auction process was technically for more money — $30 a share, specifically — that was for the everything (streaming, studio, and cable). 

Paramount, rejected but not defeated, felt they had the better offer, so they “went hostile.” In finance terms, going hostile simply means even when the target’s board rejects your offer, you go directly to shareholders, trying to win the deal through a shareholder vote and public pressure. It’s a way of saying, “Fine, if the board won’t sell, we’ll convince the owners to take our offer anyway”.

Now, what alarmed us here at The Wall Street Skinny was the financial press headlines saying “Paramount went hostile and outbid Netflix”. The reality is, PSKY didn’t necessarily “outbid” NFLX.

You can’t make an apples to apples comparison of $27.75 and $30.00, because Netflix only wants the studio and streaming assets, not the declining cable assets. The question as to which bid is higher depends entirely on how you value the cable assets. 

When WBD’s board looked at Netflix’s $27.75 bid, they concluded that the grossed up value – including the cable assets – would be more like $31–$32 per share.

Meanwhile Paramount felt the cable assets were only worth $1 extra. In their minds, Netflix’s grossed up offer amounted to a measly $28.75. That’s why the entire fight as to who offered more money collapses into one simple question: what are the cable assets actually worth?

Research analysts and bankers have thrown out numbers ranging from $1 to $5 per share, to “honestly, you should pay someone to take it off your hands.”

But focusing purely on the bidding war misses the second insane part of this deal which is: the Paramount-Skydance bid is nothing like a traditional public-company acquisition. 

In “normal M&A”, you usually have a larger, healthier buyer purchasing a smaller target. The buyer is laser-focused on EPS impact, ratings, and not over-levering themselves.

Paramount–Skydance is the opposite. They’re dramatically smaller than Warner Bros. PSKY equity is only worth about 20% of what they are offering to WBD shareholders ($15bn vs. $72bn). PSKY is already highly leveraged at ~5.5x (per CapIQ) so, not only do they not have the size, they don’t have the balance sheet capacity to fund a “normal” deal.

Most “normal M&A deals” look like Netflix’s offer where you have a larger company by market cap buy a smaller business and the analysis focuses on: "what is the optimal mix of cash and stock needed to fund this transaction”. Said differently, “how much equity and/or debt will the buyer have to raise to pay for this deal?” Here, PSKY can’t fund any of the acquisition. so the ENTIRE source of funding is coming from external parties, in what looks like a “traditional mega LBO”.  

Okay, so how does this work? Well PSKY needs to come up with cash to buy out WBD’s shareholders (at a $30 offer price that’s about $72bn). They also need to come up with cash to refinance a meaningful portion of Warner’s debt (~$20bn), and then there is the $2.5bn breakup fee that is owed to Netflix if WBD doesn’t go through with the transaction. That amounts to something like $95bn before M&A fees.

To fund that, they are raising money the same way you’d finance a traditional LBO: raising $54bn from lenders like Apollo, BofA, and Citi (about 5.5x pro forma leverage), and getting $41bn of cash in the form of new equity. That new equity is coming from: 

• Larry Ellison (father of PSKY’s CEO, David Ellison)/RedBird who would get voting shares ($17bn), 

• Middle Eastern sovereign wealth funds and Jared Kushner’s private equity firm, Affinity Partners ($24bn) getting non-voting shares

Paramount is less the buyer and more the vehicle that allows other capital providers to execute the deal. Yes, PSKY shareholders will roll their $15bn of equity into this wildly transformed company. But again, PSKY in its current form is neither raising debt or equity nor is it using its cash on balance sheet. Instead they’re raising debt using WBD’s balance sheet (your typical LBO model) and finding external inventors to make this deal work.

That leads directly into the part of this deal that has galvanized so many pundits on social media: the significant foreign funding as part of the transaction.

It’s important, however, to understand that ownership and control are not the same thing. 

Economically, you can sketch out a simplified pro forma equity picture to answer the questions: who has equity in the new company, how much does each party have, and what is the split? As we know,

• $15bn existing Paramount–Skydance (27%) 

• $17bn Ellison/RedBird (30%)

• $24bn from Saudi’s PIF, Qatar’s QIF, Abu Dhabi’s L’imad, and Jared Kushner’s PE firm Affinity partners (43%)

The crucial nuance though, is that only Larry Ellison and Redbird would get controlling shares. Existing PSKY class B shareholders had none to begin with, and the Middle Eastern SWFs and Jared Kushner wouldn’t get any either. 

Paramount–Skydance already operates with a dual-class setup with class A and class B stock where the public shareholders (class B) don’t have real voting power. When the Ellisons bought Paramount from Sheri Redstone in August, they bought not only all of her controlling shares, but all the other class A shares too.

Therefore, if you’re a regular shareholder who owns PSKY through a brokerage account, you have no control today — and you have no control after the deal closes. The same logic applies to the foreign investors. They may get meaningful economic exposure through equity, but if they’re in a non-voting class, they don’t formally control governance. That said, the concern people keep circling isn’t just what the charter documents say — it’s whether there’s “soft influence” that can occur behind closed doors even without formal votes, which is much harder to regulate than a cap table.

Regardless of who wins this bidding war, whether or not this deal goes through at all will be a big test of anti-trust. It is not guaranteed that either transaction would be approved. However, Trump is close with Ellison, and has previously expressed a wish for CNN to change hands.

But for all those wringing their hands: even if Netflix closes on the studio/streaming assets, the cable networks will be left behind in a separate, publicly traded entity that could still be bought later by someone else!

In other words, not only does the Netflix deal not permanently remove those assets from the universe, it arguably makes them a standalone target for acquisition. As to whether PSKY would be able to (or even want to) buy them without the rest of the business is up for debate, given PSKY is so highly levered as it is.

However this plays out, it’s an incredible live lesson in what “hostile” really means, on why this financing looks more like a mega-LBO than a conventional merger, and how dual-class shares can leave public investors with ownership…but without actual control.

5 luxe gifts your favorite finance exec didn’t know they needed

Forget the standard Hermès H-blanket or gold-plated pen. For the finance executive who truly has it all, guest contributor Leanna Haakons has curated five luxe, practical, and slightly unexpected gifts. Each selection comes with a touch of financial insight, pairing Leanna’s sophisticated style with her signature smart analysis.

1. The Cozy Hedge: Asprey London Lambswool Throw (~$855)
   Asprey London has been a discreet favorite of royals and luxury insiders for more than two centuries, so this lambswool throw is an elegant upgrade from the cliché Hermès “H” blanket. It signals refined taste and keeps any space cozy and sophisticated.

   Financial Insight: Much like a well-constructed portfolio, this throw provides both literal and metaphorical cushioning. With 2026 shaping up for moderate market volatility as rates normalize, it is a reminder that thoughtful hedging, whether in lambswool or asset allocation, matters.

   Links:

   • Asprey London Double Face Lambswool Throw
     

2. Hermès H Tissage Bridge Playing Cards (Set of 2) ($205)

   A playful, lower-cost luxury gift, perfect for office tables or casual game nights. Sleek, tasteful, and stylish.

   Financial Insight: 2026 is expected to bring some stabilization in fixed-income markets. Strategic thinking, whether at the bridge table or evaluating credit spreads, remains essential. These cards are a reminder that calculated risk-taking is both fun and crucial.

   Link: Hermès H Tissage Bridge Playing Cards

3. Tiffany T True Espresso Cup & Saucer Set ($420)

   A chic espresso set perfect for morning rituals or elegant coffee breaks. Classic design ensures it complements any setting.

   Financial Insight: As investors face potential swings in 2026, routines like morning coffee and portfolio review echo the discipline of consistent savings and steady income streams. With monetary policy easing, fiscal expansion, and AI-driven growth shaping markets, these rituals remind us that stability amid uncertainty comes from reliable cash flows and smart diversification. Anchoring strategies, whether in daily habits or fixed-income coupons, matter when policy shifts and global volatility test resilience.

   Link: Tiffany T True Espresso Cup & Saucer Set

4. SMEG × Dolce & Gabbana Sicily Electric Kettle ($950)

   A design-forward, retro-style kettle that functions as both an appliance and a work of art. Ideal for coffee, tea, or simply elevating a countertop, it brings a touch of Italian glamour to daily routines.

   Financial Insight: Think of this as a reminder that even the most sophisticated systems rely on stable inputs. In 2026, markets are expected to reward consistency and high-quality fundamentals over speculation. Just as precise temperature control improves every pour, steady contributions and disciplined rebalancing can enhance long-term returns. It’s a subtle nod to valuing process as much as outcome.

   Link: SMEG × Dolce & Gabbana Sicily Electric Kettle

5. Baccarat Octogone Tray, Coasters & Harmonie Tumbler Set ($870)

   A refined crystal set with a lacquer tray, coasters, and tumblers. The clean lines and weighty glass feel like something Don Draper would keep on his credenza, only with better HR compliance. Whether placed in a corner office or used for a Friday night pour at home, it brings instant sophistication with a hint of cinematic nostalgia.

   Financial Insight: Think of this as a tasteful way to keep a few “liquid assets” close at hand. Liquidity will remain a central theme in 2026 as markets adjust to a slower easing cycle. The Fed’s December 10 decision delivered a third consecutive rate cut to a range of 3.50% to 3.75%, with one more expected next year as the labor market cools and inflation pressures persist. This set serves as a lighthearted reminder that managing what is liquid, whether bourbon or balance sheets, is part of responsible stewardship.

   Link: Baccarat Octogone Tray, Coasters & Harmonie Tumbler Set
   
   Whether gifting for a colleague, a friend, or yourself, these five selections combine style, functionality, and financial insight. The best gifts aren’t just luxurious, but also thoughtful, enduring, and perfectly timed for the year ahead.
   
   About the Author

   Leanna Haakons is the founder of Black Hawk Financial. She is a bestselling financial author and expert in institutional business development with a passion for promoting financial literacy. Leanna regularly shares insights on markets, investing, and the intersection of finance and lifestyle on national networks including CNBC, Bloomberg, and Yahoo Finance.