Warner Bros. Discovery’s Strategic Shift
David Zaslav, the CEO of Warner Bros. Discovery, expressed to staff that the abrupt decision to partner with Paramount Skydance felt like “whiplash.” He maintained that the media company needed to expand to avoid chaos in the industry.
“The pace has been quite surprising for us too,” Zaslav noted during a town hall on Friday morning, mentioning that company leaders were still “navigating our path forward.” This statement emerged after audio from the meeting was leaked, initially reported by Business Insider.
Despite the sudden change, Zaslav remained optimistic about the significant deal, encouraging employees by saying, “Together, we can achieve great things.”
“It’s been challenging, but we’re growing stronger,” he added during the meeting.
Zaslav framed the deal as essential for the company’s future, stating, “For Warner Bros. to thrive, we needed to expand, to go global.”
He cautioned that “some companies are becoming large enough to overpower us.”
While acknowledging that “a deal may not materialize,” he reassured employees that the company would simply take $7 billion and move forward if necessary.
The comments come as Paramount Skydance emerged as the leading bidder for Warner Bros. Discovery after Netflix chose not to elevate its offer to $27.75 per share.
Paramount increased its bid to $31 per share in cash and agreed to a $7 billion ticking and deregulation fee, paving the way for a potential merger valued at about $110 billion, which is likely to face several months of regulatory reviews.
The $7 billion fee mentioned by Zaslav is essentially a safeguard for WBD should the merger be blocked due to antitrust issues. This could help ease shareholder concerns about the deal failing and provide Zaslav with leverage; if things don’t go as planned, he would still walk away with a substantial cash infusion.
Earlier reports indicated that Paramount Skydance has taken the lead over Netflix for acquiring WBD after Netflix’s Ted Sarandos faced challenges in convincing the Trump administration to support the proposed takeover.
Sarandos had met with key figures, including Attorney General Pam Bondi, in an effort to prevent opposition to the deal on antitrust grounds, but ultimately fell short.
In a social media post earlier this month, President Trump criticized Netflix after a board member cautioned that companies should be prepared to face consequences if Democrats reclaim power.
The shift concludes an intense bidding war that started on December 5 when Netflix initially proposed acquiring Warner Bros. for $27.75 per share. Later, Netflix modified the offer to an all-cash structure to facilitate shareholder approval, which highlighted how advanced their proposal was before Paramount intervened.
Led by David Ellison, Paramount initially offered $30 per share for the entire company before enhancing their offer to $31 per share in cash.
Paramount also agreed to pay $2.8 billion, which WBD owed Netflix, and would incur ticking fees of 25 cents per share each quarter if the deal was prolonged, ultimately incentivizing WBD’s board to see this as a “valuable opportunity.”
The proposed merger would create an entertainment powerhouse with over 200 million streaming subscribers across HBO Max, Discovery+, and Paramount+, though it would still lag behind Netflix and YouTube in total TV market share.
At the end of 2025, WBD had 131.6 million streaming subscribers and a net debt of $29 billion, while Paramount+ boasted 78.9 million paid subscribers, illustrating the financial ambitions and challenges that Zaslav faces.
Netflix stated on Thursday that it would not increase its bid, and WBD declared that while the partnership “could have provided shareholder value with a clear path to regulatory approval,” matching Paramount Skydance’s higher offer no longer made financial sense.
A White House spokesperson confirmed that the president has “good working relationships with all parties involved” in the potential transaction and would maintain a neutral stance throughout the process.
Inquiries have been made to WBD, Paramount Skydance, and the White House for further comments.
