Versant’s Weak Debut Complicates Netflix Bid for Warner Bros. Discovery

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David Ellison, CEO of Paramount Skydance, might have a stronger position in his attempt to acquire Warner Bros. Discovery (WBD). While Netflix initially seemed to win the deal in early December with a cash and stock offer approved by WBD’s board, Paramount responded by making an all-cash offer directly to WBD shareholders. Now, the poor performance of Versant, Comcast’s newly separated cable division, is raising doubts about the value of Netflix’s bid, as Charles Gasparino of the New York Post reports that it relies on WBD selling off its own cable properties.

The 2022 combination of Warner Bros. and Discovery hasn’t gone well, leaving the company with a large amount of debt. Before Paramount showed interest in acquiring Warner Bros. Discovery (WBD), WBD announced plans last June to split into two separate, publicly traded companies – a strategy similar to one Comcast was developing for Versant.

Versant’s performance is being closely watched by Warner Bros. Discovery (WBD) shareholders who are considering whether to accept Netflix’s offer or a cash offer from Paramount. Unfortunately, Versant’s stock price fell 22% in its first two days of trading, and this disappointing start could influence those shareholders who haven’t yet made a decision.

Why Versant Matters

Comcast recently announced it’s creating a new company called Versant. According to Variety, this move is designed to allow NBC to concentrate on traditional TV and streaming, while giving its other media properties—including CNBC, MS NOW (formerly MSNBC), E!, Fandango, and Rotten Tomatoes—a fresh start. All of these brands will now operate under the Versant umbrella.

Saying a company needs to “eke out a new existence” is often a gentler way of admitting it’s slowly failing. YouTube TV is predicted to become the biggest pay-TV service, surpassing Comcast, by 2026. Investors might be hesitant about Versant because people are watching entertainment in different ways than they used to.

What Netflix and Paramount Are Offering

Netflix wants to buy Warner Bros. Discovery’s studio and streaming services, offering shareholders $27.75 per share in a combination of cash and stock. To make the deal most beneficial for investors, separating the company would need to increase the value of those studio and streaming assets to $30.75 per share.

As a movie and TV guy, I’ve been hearing a lot of chatter from the financial world lately, and it’s not great news for Netflix. Apparently, a lot of analysts think Netflix is overestimating how much those old cable networks are actually worth. The recent, not-so-hot launch of Versant seems to be proving them right. One insider at Paramount told CNBC’s David Faber that this confirms everything they’ve been saying, and they think investors are finally starting to see it too.

Paramount has consistently described Netflix’s deal as unstable and complicated. They’re now offering to acquire Warner Bros. Discovery (WBD) in its current state – including its cable channels – for $30 per share, paid entirely in cash. This offer values WBD at a total of $108 billion. However, WBD’s board is recommending shareholders decline the offer, believing it doesn’t offer enough financial value and carries significant risks, even with a personal guarantee from Oracle’s Larry Ellison.

Shareholders in both scenarios are taking on some risk, and changing consumer tastes are making things even more uncertain. While Versant likely won’t decide the future of Warner Bros. Discovery, its disappointing launch suggests investors are losing interest in companies spun off from cable networks.

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2026-01-10 00:56