David Ellison’s Paramount Skydance is adding additional financial commitments to its hostile takeover bid for Warner Bros. Discovery as it continues to try to break the Netflix-WB deal.
Paramount announced Tuesday that it will add “incremental cash consideration” to WBD stockholders of 25 cents per share (equivalent to approximately $650 million in quarterly cash value) for each quarter in which Paramount’s proposed acquisition is not completed after December 31, 2026.
This additional “ticking fee” reflects Ellison and his team’s confidence that the Paramount-WBD deal will move more smoothly through regulatory approval than the Netflix-Warner Bros. merger. Paramount (and others) argue that if Netflix owned HBO Max, it would effectively have a monopoly on subscription streaming in multiple markets. Netflix rejected this, arguing that even with the introduction of HBO Max, its share of TV viewing in the US would be 10%, still below YouTube.
Additionally, as part of Paramount’s easing of transaction terms for Warner Bros. Discovery, Paramount announced that it would pay a $2.8 billion split fee due to Netflix upon termination of the Netflix agreement if WBD shareholders fully accept Paramount’s $30 per share offer for Warner Bros. Discovery.
Paramount also said it would eliminate WBD’s potential $1.5 billion in financing costs associated with the debt exchange offer by “completely blocking any exchange offer that would reduce the contractual obligations of WBD’s bondholders.” Paramount announced that it would fully repay the $1.5 billion fee to WBD shareholders without reducing the $5.8 billion termination fee in the “in the unlikely event” that the Paramount deal is blocked by regulators.
Paramount also extended the expiration date of the tender offer to March 2, 2026, with revised terms. WBD plans to hold a special shareholder meeting in late March or early April to vote on the deal with Netflix.
Representatives for Warner Bros. Discovery and Netflix did not respond to requests for comment.
Paramount sent a letter to the WBD board outlining the terms of the enhanced offer. WBD’s board has rejected Mr. Ellison’s M&A proposals eight times, and has repeatedly said it will stick to Netflix’s $27.75-per-share deal to buy Warner Bros.’ film and television studios and HBO Max, signed in early December.
“The added benefit of our excellent all-cash offer of $30 per share reflects our strong commitment to maximizing the value of WBD stockholders’ investments,” said David Ellison, Paramount’s chairman and CEO, in a statement. “We are backing this offer with billions of dollars, making meaningful enhancements that provide shareholders with value certainty, a clear regulatory path, and protection from market volatility.”
Other commitments made by Paramount Skydance in the amended acquisition offer:
If WBD’s funding sources do not extend the maturity of WBD’s existing $15 billion bridging loan, Paramount’s debt funding sources are “well prepared to do so (with additional costs to be borne by Paramount).” Alternatively, Paramount plans to allow WBD to raise permanent financing “in any manner it chooses,” as long as the debt is redeemable at “a commercially reasonable cost.” Paramount said it would provide “flexibility” during the signing and execution of the WBD, including aligning it with comparable Netflix Interim Operating Terms. Regarding Discovery Global (WBD’s proposed linear TV spin-off), Paramount said it is “ready to discuss a contractual solution with the WBD Board of Directors in light of the possibility that WBD’s financial performance for its linear network business may continue to deteriorate beyond what it currently anticipates.”
Paramount’s revised offer, which has an enterprise value of about $108 billion, will be “fully financed” with an increased $43.6 billion in equity commitments from Larry Ellison (David’s father and tech billionaire) and Redbird Capital Partners, and $54 billion in debt commitments from Bank of America, Citigroup and Apollo. Other backers of Paramount’s WBD bid include sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.
Similar to Paramount’s Dec. 22 proposal, Paramount’s financing includes a $43.3 billion “irrevocable personal guarantee from Larry Ellison,” which includes equity financing for the proposed M&A and “any and all claims against Paramount.”
Warner Bros. Discovery said it plans to spin off Discovery Global, which includes assets such as CNN, TNT, TBS, Food Network, HGTV, other cable networks and Discovery+, in the third quarter of 2026, before the deal with Netflix closes.
WBD said Discovery Global’s net debt target was $17 billion as of June 30, decreasing over time to $16.1 billion as of December 31, 2026.
Paramount claims its analysis shows that Netflix’s cash consideration would be reduced to $23.20 per share if Discovery Global were spun off with debt leverage similar to Versant Media Group, the TV-focused entity spun off from Comcast’s NBCUniversal earlier this year. Paramount said that assuming both the valuation multiple and leverage ratio match Versant’s, Discovery Global’s stock would be valued at about $3.55 per share, and the total value of the Netflix deal would be only about $26.75. That would make Paramount’s all-cash offer of $30 per share 12% higher than what WBD shareholders would receive in the Netflix deal, Paramount claims.
The partnership with Netflix will give WBD shareholders a stake in Discovery Global, but “the company’s business is underperforming and will require it to support an unrealistic debt burden of $17 billion (as of June 30, 2026) to meet the high end of Netflix’s consideration range,” Paramount said.
Also Tuesday, Paramount said it “continues to move forward in the regulatory approval process.” On February 9, 2026, Paramount Skydance was certified as having complied with the Department of Justice’s Second Request for Information dated December 23, 2025 regarding its tender offer to purchase Warner Bros. Discovery stock for all cash. Separately, Paramount also received permission for a tender offer from the German Foreign Investment Authority on January 27, 2026.
