Unfortunately the decision of Netflix to drop its bid for Warner Bros was not the biggest news of the last few days, but it was the biggest news with implications for the comics and entertainment space. As you may have already seen, the streamer decided not to match the sweetened offer from Skydance Paramount, which now plans to pay $31/share for the studio, the IP and the network channels. Paramount’s main goal here appears to be to put CNN under the personal control of a family close to President Trump, with price being no object.
Many media analysts see Paramount’s “offer they can’t refuse” as a knockout blow in the battle for the company that owns, among other things, DC Comics and assorted other genre IPs including the Harry Potter franchise. It is also being painted as the worst of two bad options for one of America’s great movie studios. Netflix may not have the best interests of the theatrical movie business in mind, but its motives for acquiring WB appeared to be primarily around potential economic and entertainment benefits of consolidation, not media empire-building for the sake of politics.
Not a done deal. The boards of directors of the various companies took a quick and unanimous vote to move forward with the merger. Needless to say, the deal is unlikely to face much scrutiny from the federal government, and Wall Street (and the entertainment industry trades) are treating it as a fait accompli.
Of course that’s what they said about the Netflix deal too, and that was a go until it wasn’t.
So what could knock Skydance Paramount, a very determined suitor, off track considering all the momentum moving forward?
First let’s look at the business basics. Paramount’s offer is $31 per share in cash, meaning they are valuing WB at roughly $110 billion. That is a very, very high valuation for a company that is already saddled with $50 billion in debt and struggles to generate enough revenue sufficient for future cash flows.
To come up with this king’s ransom, Paramount, which is already indebted and bleeding money, secured a $57.5 billion debt commitment from a consortium of banks. Larry Ellison, the billionaire father of Paramount Skydance CEO David Ellison, is pushing $45.7 billion of his own stack into the pot, while also guaranteeing additional funds to satisfy bank solvency requirements.
Ellison Wonderland. Larry Ellison, about as close to a Lionel Luther-like (as played by John Glover in Smallville) figure as exists in the real world, is the founder/CEO of Oracle, one of the world’s biggest tech companies. Oracle rose to prominence making software that runs hardcore business processes but has lately been one of the biggest drivers of investment in AI infrastructure.
Ellison senior’s net worth is heavily tied to Oracle’s performance. A 5% drop in Oracle shares in late 2025 took a $9 billion bite out of his bank account. That still left about $240 billion, but when you are that exposed to ups-and-downs, a deal this big can change the calculations.
And exposed is the word for Oracle. In the great AI money-go-round, where software companies are buying yet-to-be-manufactured chips to fill up yet-to-be-built data centers to supply yet-to-materialize AI services via debt-riddled, money-bleeding startups like OpenAI, Oracle may be the one tech giant left holding the bag if and when the house of cards starts to collapse.
That’s because Oracle is the one putting shovels in the ground to build the data centers, or investing heavily in the companies that are. Those are hard costs that will be difficult to recoup if partners further upstream start to renege on their promises. Oracle has racked up $124 billion in debt during this construction binge, currently sports a debt-to-equity ratio well over 450%, and the company’s free cashflow turned negative (to the tune of $10 billion in late 2025) for the first time since Nirvana was top of the charts.
The bottom line is that those kinds of numbers would make Diamond Comic Distributors look like a prosperous business if AI euphoria starts to crumble.
Larry Ellison, like Trump, has a Boomer’s unshakable faith in the value of linear media and cable news to influence the public, and it may be worth nearly anything for them to be able to tell Wolf Blitzer what to say. But at a certain point, business is business, and even Larry Ellison will have a hard time standing behind tens of billions of dollars of loans if the underlying asset, Oracle, hits the skids. If the AI bubble bursts, this deal will go down with it.
Don’t forget the regulators. In any kind of a sane world, the merger of two gigantic studios and distribution networks, contingent on the financial health of a tech leviathan like Oracle, would raise all kinds of alarm bells. This is exactly the kind of thing anti-trust laws were set up to handle.
Here in this world, with the Ellisons’ patron putting his thumb on the scales at the DOJ, it is vanishingly unlikely the proposed Paramount-WB deal will face scrutiny from federal anti-trust lawyers, but they are not the only game in town.
These are California companies, and California state attorney general Rob Bonta has already made noises about challenging the deal in court. Other states could also get involved on behalf of their citizens who, it could be claimed, are harmed by the potential market consolidation.
Then there’s the EU, the global superpower of bureaucratic regulation, which might have something to say, especially in light of increasingly frosty relations with the U.S.
All this red tape is likely to raise financial rather than existential problems for the deal. There will be fines, levies, legal fees, possibly some dismemberment of units within the merged company, all of which will further increase costs, drag out timelines and sandbag future profitability. Ellison, Oracle and Paramount could all bleed out before any of this happens.
Back to DC. If you’re here for the DC stuff, all this Oracle business may seem like a long walk for a short drink, but the bottom line is that the new potential owner of DC comes with a lot more baggage than Netflix, who seemed solvent, at least partly attracted to the IP play and ok with the Gunn/Safron-verse. It’s not clear what Paramount Skydance is up to beyond their dreams of owning the news, since they already own a studio, an IP library, a second-tier streaming service, and bragging rights as the hot new thing in Hollywood.
Layoffs are probably in the cards, as they were with Netflix. Except Paramount Skydance is, on its own terms, in much worse financial shape than Netflix, even if Oracle stays upright. Everyone is really going to have to suck it in for this to pencil out.
Among other things, it means Jim Lee’s proud pledge to keep DC AI-free won’t have much of a shelf life. Even if “AI-driven efficiencies” aren’t a huge part of Paramount’s overall plan on the creative side (and they probably are, because what do any of these people know about art and storytelling?), you can’t have your executives badmouthing the technology that is keeping the whole business plan afloat.
Is it possible that the Ellisons and their circle will try to recruit the creative side into their political project? I mean, sure, why not? We’re already in the dumbest timeline.
On the upside, I guess we can look forward to that long-awaited JLA/Star Trek crossover. And maybe this attempt to “unlock the value” of Warner Bros will end up just as successful the last three.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
Source: ICv2
