Despite Paramount Skydance being the frontrunner for months, Netflix is now taking the lead in the race to acquire Warner Bros. Discovery (WBD), ramping up a full-scale lobbying push that is rattling rival bidders and US regulators.

The streamer’s CEO Ted Sarandos has spent recent weeks working to calm antitrust concerns inside the Trump administration and on WBD’s board, positioning Netflix as a serious contender despite historically avoiding major takeovers.

The move has narrowed the gap with current frontrunner Paramount Skydance, which has bid roughly $US60 billion (A$90 billion).

Paramount’s involvement is being closely watched in Australia, where any deal could have knock-on effects for its local arm Network Ten, already under review following ongoing audience struggles.

Netflix’s share price has fallen nearly 10% since news of the bid emerged, with investors wary of a costly acquisition.

WBD has requested all three bidders – Paramount Skydance, Netflix and Comcast – return with improved offers by December 1, as the sale enters its second round.

The company is seeking top dollar for its studio and streaming assets as part of a planned breakup that would separate Warner Bros from its legacy cable networks, including CNN.

Netflix’s pitch centres on a legal argument dubbed “category ambiguity” – claiming streaming does not fit traditional antitrust frameworks due to competition from platforms like YouTube and social media.

Sources say the theory is gaining traction with WBD directors and even staff inside the US Department of Justice.

If successful, Netflix would acquire HBO Max and the Warner Bros studio, adding major franchises including Harry Potter, DC Comics and Lord of the Rings to a catalogue light on long-running IP.

The streamer is reportedly willing to maintain theatrical releases to avoid backlash from Hollywood filmmakers and exhibitors.

But the deal faces political barriers.

President Trump has publicly favoured Paramount Skydance, led by David Ellison (pictured below) due to his alignment with the administration and the prospect of reshaping CNN.

Paramount is the only bidder seeking to buy WBD in full, including its cable networks – a move that could further complicate Network Ten’s future in Australia if restructuring follows.

Comcast remains the third player, though analysts expect tougher regulatory scrutiny given Trump’s long-running feud with CEO Brian Roberts.

Despite its aggressive push, Netflix still has hurdles.

Rival legal advisers continue to argue that combining the world’s No.1 and No.3 streaming services would trigger a regulatory block.

WBD’s board will now assess second-round bids, with a decision expected in the coming weeks.