Warner Bros. Discovery’s (WBD) high stakes asset auction is entering a decisive phase, and while the company is said to be leaning toward Netflix’s bid, rival bidder Paramount Skydance is preparing a backup strategy to stay in the fight, according to sources who spoke with New York Post’s On The Money.

Netflix has reportedly submitted a majority cash offer for the Warner Bros. studio and HBO Max. Paramount Skydance, by contrast, has made an all-cash proposal for the entire company, which includes cable networks such as CNN and HBO. People involved in the process say WBD could select a winning bidder as early as this week.

Netflix

A source close to WBD described the situation as a tight competition between Netflix and Paramount Skydance, calling the result a “toss up” with “50 50” odds. Despite this, speculation has grown that WBD is warming to Netflix’s offer. Insiders say Netflix CEO Ted Sarandos and WBD chief David Zaslav have a strong relationship, and the WBD board views Netflix as a more reliable long-term caretaker of the company’s assets when compared with David and Larry Ellison, who bring less experience in the major media landscape.

If Netflix is chosen, the Ellisons are preparing to take their case directly to Warner’s shareholders, bypassing the board in a tactic that resembles a hostile takeover bid, according to people familiar with their thinking. Their argument would be that Netflix’s deal is unlikely to pass scrutiny from the Department of Justice under President Trump’s antitrust team. If the matter were litigated, they believe Netflix would lose in federal court.

The Ellisons plan to emphasise that their own proposal is the only one likely to move quickly through regulatory channels and that shareholders would receive immediate compensation for the entire company. They also intend to argue that even if Netflix offers a majority cash bid close to US$30 a share, which is above Paramount Skydance’s approximate US$25 bid, shareholders should discount that number. A prolonged legal battle lasting more than two years could erode the value of WBD’s assets while the company remains in limbo.

“The Ellisons are not going away quietly and are making contingency plans if they lose,” said a senior media executive who has spoken with individuals at Paramount Skydance. Representatives for Paramount Skydance, WBD and Netflix all declined to comment.

The New York Post recently reported that senior White House officials met to examine concerns about the Netflix proposal. Pairing Netflix’s dominant streaming platform with Warner’s third ranked service, HBO Max, would combine two similar horizontal assets, a move that often draws negative antitrust findings.

Government officials also discussed the likelihood that European regulators would strongly oppose a Netflix-WBD merger.

Paramount Skydance, meanwhile, is expected to argue that its only major overlap involves merging Warner’s studio with Paramount’s, a combination that does not reach monopoly status due to the large number of independent production venues. Sources say Trump-era regulators have fewer concerns about a studio combination of this sort, as well as another potential offer from Comcast.

People familiar with the Ellisons’ strategy say they are prepared to wait for Netflix to fail in court, at which point they could return with an offer that avoids a competitive bidding environment.

Comcast’s position remains uncertain. The company, led by Brian Roberts, has submitted a second round bid but would need to take on debt to match offers above US$25 per share. Any winning proposal could value WBD at up to US$70 billion. Roberts has a difficult relationship with Trump, who has frequently criticised him and Comcast’s MSNBC network. Even Comcast’s own bankers acknowledge that Roberts is the dark horse in the process.

A Comcast spokesperson had no comment.