Paramount Skydance launched a hostile bid worth $108.4 billion for Warner Bros. Discovery, challenging a rival offer from Netflix and injecting uncertainty into the future of Hollywood's storied media company.

Since 2000, the parent company of the Warner Bros movie studio has been through three major reorganizations. Now the company is facing its fourth reorganization.

To better compete with Disney

If Paramount succeeds in acquiring Warner Bros. Discovery, the combined company would surpass market leader Disney in the US and Canada's box office market share.

Though Disney+ remains a big competitor in the streaming space, with 15 percent global app monthly active user share, it lags slightly in individual user engagement metrics compared to Netflix and HBO Max, according to market intelligence firm Sensor Tower.

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The potential buyout will also beef up Paramount's content slate with HBO Max's critically acclaimed shows ranging from Game of Thrones and Succession to classic prestige titles such as The Wire and The Sopranos.

YouTube carving out market share

Alphabet's YouTube dominates other streaming platforms, with the largest share of total TV viewing time. It benefits from a combination of user-generated content, advertising revenue and live services.

The video streaming service said in March that it had more than 125 million paying subscribers, though those figures include users who are signed up for temporary free trials.

YouTube has around 2.9 billion global mobile app monthly active users in the current quarter, exceeding the combined MAUs of major streaming services, including Netflix, Disney+, HBO Max, Paramount+ and Peacock, according to Sensor Tower.

In October, YouTube led streaming in the United States with 12.9 percent viewership, followed by Netflix with 8 percent share, according to Nielsen data.

Defining moment for Hollywood

Shares of Warner Bros. Discovery closed up over 4 percent on Monday, as the sale of the company would be one of the most consequential moments reshaping the media industry.

With a market value of over $60 billion, the company's shares have more than doubled since reports of Paramount's interest in the company surfaced early in September.

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"Paramount and Netflix are both among the world's largest content spenders. There will be significant concentration in content spending if either of them purchases WBD. Paramount has more direct overlap due to theatrical releases, but the size of each bidder's content spending could spark antitrust concerns," said eMarketer analyst Ross Benes.

Dealing with debt

Warner Bros. Discovery has roughly $35 billion in debt, meaning any deal will carry a significant debt load. The company had earlier rejected bids from Paramount, before the David Ellison-led company escalated to a hostile takeover bid.

In 2022, the WarnerMedia and Discovery merger resulted in a significant debt burden, which has stifled the company's long-term strategic initiatives.

Under their potential deals, Paramount is expected to assume roughly $30 billion of debt from Warner Bros. Discovery, while Netflix would assume around $10 billion of debt.