Netflix deal momentum held at Warner Bros. Discovery after a fresh board rejection. The board urged shareholders to stick with the Netflix deal.
What happened
Warner Bros. Discovery (WBD) said its board unanimously rejected a revised tender offer from Paramount Skydance. WBD said the offer was not a “Superior Proposal” under its merger agreement tied to the Netflix deal. (WBD release) ([Warner Bros. Discovery IR][2])
Paramount Skydance’s revised bid was valued at about $108.4 billion, Reuters reported. WBD said the structure depended on heavy debt and added closing risk versus the Netflix deal. (Reuters) ([Reuters][1])
Why WBD preferred the Netflix deal
WBD framed certainty as the core issue. It called the Paramount Skydance proposal a leveraged buyout that could constrain operations. It said the Netflix deal offered “superior value” with fewer execution risks. (WBD release) ([Warner Bros. Discovery IR][2])
Reuters said WBD focused on the debt load in Paramount’s financing plan. The report cited $87 billion of debt in the revised structure. That scale drove the board’s risk concerns. (Reuters) ([Reuters][1])
The Netflix deal also carries a break fee. Reuters reported that ending the Netflix deal would cost WBD about $4.7 billion. That penalty reduced the appeal of a higher headline bid. (Reuters) ([Reuters][1])
What Paramount changed, and why it still fell short
Paramount Skydance tried to strengthen terms. Reuters reported it added a $5.8 billion reverse termination fee and included a personal guarantee tied to Larry Ellison. WBD still said the revised offer remained inferior to the Netflix deal. (Reuters) ([Reuters][1])
The Financial Times said WBD also highlighted the stability of Netflix as a counterparty. It reported WBD was advancing an ~$83 billion transaction with Netflix for studio and streaming assets, alongside a cable-asset spin plan. (Financial Times) ([Financial Times][3])
The timeline investors are watching
This is now a shareholder contest. AP reported Paramount set a January 21 deadline for shareholders to tender shares. WBD is urging holders to reject that tender and support the Netflix deal instead. (AP) ([AP News][4])
That date matters for both sides. It creates a near-term decision point. It also keeps pressure on WBD’s board to defend the Netflix deal in public.
What this means for streaming and Hollywood
The Netflix deal is a direct bet on scale in premium content and global distribution. It would pair Netflix’s platform with WBD’s studio and streaming brands, as described in FT reporting. ([Financial Times][3])
Paramount’s push shows a second trend. Legacy media buyers still seek consolidation. They want bargaining power with talent and advertisers. They also want leverage in carriage talks.
Yet leverage is the dividing line. WBD’s statement argues the Paramount plan adds too much debt risk. That stance makes the Netflix deal the “safer” consolidation route, in WBD’s view. ([Warner Bros. Discovery IR][2])
What to watch next
Regulatory posture
Both paths would face review. WBD’s board leaned on “certainty” language. That implies it sees the Netflix deal as more navigable than a debt-heavy tender. ([Warner Bros. Discovery IR][2])
Shareholder pressure
FT reported some investors have pushed WBD to engage Paramount. If that pressure grows, the Netflix deal vote could get harder. ([Financial Times][3])
Operating impact
WBD warned that the Paramount structure could restrict investment. If that argument resonates, it strengthens the Netflix deal narrative.
Bottom line
The board’s message was blunt: the Netflix deal remains WBD’s preferred outcome. Paramount’s higher headline number did not overcome debt and closing risk. ([Reuters][1])