Warner Bros. Discovery’s Board Responds to Paramount Skydance’s Proposal
The board of Warner Bros. Discovery has described Paramount Skydance’s revamped offer as an “excellent proposal,” which presents a potential obstacle for its current merger negotiations with Netflix.
This announcement came on Thursday, giving Netflix a brief window—specifically, four business days—to accept this new offer, or risk losing the agreement altogether.
David Ellison, who leads Paramount Skydance, has proposed $31 in cash per share for Warner Bros. Discovery, alongside a “ticking fee” of 25 cents per share if there are any delays post-September 30. Additionally, the proposal includes a substantial $7 billion breakup fee if the deal falls through and a $2.8 billion penalty that Netflix would incur should Warner Bros. Discovery breach any regulatory conditions.
Ellison expressed his satisfaction with the WBD Board unanimously recognizing the value of the proposal, emphasizing how it offers greater value, certainty, and a quicker resolution for shareholders.
Interestingly, companies looking to acquire can label an outside bid as a “superior corporate offer” if it has been evaluated by independent advisors. Netflix’s current bid for Warner Bros. Discovery stands at $27.75 per share in an all-cash deal.
This development comes after Netflix CEO Ted Sarandos has been actively pushing for support in Washington and major European capitals to secure approval for the merger—an effort that seems essential given the warnings from officials regarding potential antitrust scrutiny.
In its response, Warner Bros. Discovery signaled to Netflix that there’s a “match period” ahead, a time during which Netflix can revise its terms—potentially including an increase in deposits or added safeguards—in order to strengthen its position.
There’s an intriguing implication here: should Netflix not seize this opportunity, Warner Bros. Discovery may decide to abandon the current deal, with Paramount Skydance possibly left responsible for the financial ramifications.
Adding an interesting layer, Ellison’s father, Oracle founder Larry Ellison, has promised supplementary equity to bolster the lender’s financial stability—raising eyebrows and discussions in various circles.
Despite everything, Warner Bros. Discovery, under CEO David Zaslav, maintains that it still views Netflix as its favored partner. The company has reiterated that the Netflix merger agreement remains active, and it continues to advocate for the transaction without any alterations to its previous endorsement.
With new bidders joining the fray—including HBO Max—this scenario is heating up, especially as tech giants like Amazon and Apple continue to enter what’s becoming a fiercely competitive streaming landscape.
