Bidders circle Warner Bros. Discovery

• WBD is hoping to strike a deal by year's end, a source familiar with the board's thinking told Axios.
• WBD, Comcast and Paramount did not comment. Netflix did not immediately respond to a request for comment.

Yes, but: WBD's board wants Paramount to up its latest offer of $23.50 per share to around $30, the source said. Its offer was an 80-20 cash-stock split.

• WBD says it's still considering a plan to split into two publicly traded companies — one focused on its studio and streaming business and the other on its legacy cable networks.
• The concern with Paramount's previous bids, the source said, is that they devalued the assets more than separating them.

Context: WBD's stock price closed at $12.54 on Sept. 10, the day before the Wall Street Journal first reported Paramount's takeover interest. Its share price has since ballooned to $24.

• Paramount's bid is an 87% premium to WBD's pre-deal talk stock price.
• Paramount has pledged to keep the company together if it purchases the entire company, including its cable assets.
• Comcast and Netflix are only interested in WBD's studio and streaming assets, sources said.

State of play: A big concern for all parties involved is how regulators would evaluate a deal that combined major streamers, studios and possibly cable behemoths.

• WBD hired the Justice Department's former antitrust division head Makan Delrahim to help navigate that process.
• Because WBD doesn't own any local broadcast assets, the deal wouldn't require Federal Communications Commission approval, but it would need the DOJ's blessing.

Reality check: Even if the Trump administration tried to pressure the DOJ to sue to block any WBD deal, a judge would need to independently rule on the case. History shows politics tend not to influence those decisions in federal court.

• For example, under Delrahim, the DOJ sued to block AT&T's merger with Time Warner in 2018 and a judge ultimately ruled in favor of AT&T.
• That ruling gives all parties involved some confidence that the DOJ could face challenges if it brought to court a lawsuit against any merger.

Between the lines: If the DOJ were to evaluate a WBD merger based on streaming subscribers, Comcast and Paramount would have stronger arguments than Netflix because Peacock and Paramount+ have far fewer streaming subscribers. (Some California lawmakers have already voiced concerns over Netflix from an antitrust lens.)

• If the DOJ were to evaluate the deal based on box office ticket sales, Netflix would have a clearer advantage over Comcast and Paramount because it doesn't own a movie studio.

• However, regulators blessed a deal between Fox Corp. and Disney in 2019 that brought together two dominant movie studios at the time.

Of note: European regulators, which tend to be much more skeptical of Big Tech's dominance, would also need to bless the deal. WBD has a big presence in Europe, most notably through Eurosport.

By the numbers: Paramount and Netflix's clear advantage over Comcast is access to cash.

• Paramount chair David Ellison not only has access to the coffers from his father, Oracle co-founder and chairman Larry Ellison, but he's also been in talks with Apollo Global Management to secure some debt financing for a potential offer, Axios has confirmed.

The intrigue: A Variety report out Tuesday suggested Paramount was prepping a $71 billion bid for WBD with backing from three Arab sovereign wealth funds. Paramount immediately pushed back on the report, calling it "categorically inaccurate."

What to watch: Comcast has reportedly hired bankers at Goldman Sachs and Morgan Stanley as it eyes a potential deal.

• The company would likely need to secure debt to help finance an agreement.
• The company has reportedly considered a leadership position for WBD CEO David Zaslav overseeing NBCU's media assets as part of its overture to WBD's board.
• Paramount has also offered Zaslav a co-CEO and co-chairman position as part of its bid.