Warner Bros. Discovery’s board of directors announced Thursday that it has determined that the latest offer from Paramount Skydance is a “superior offer” to its existing merger agreement with Netflix. The move gives Netflix four days to submit a counteroffer to the roughly $83 billion deal it signed with WBD in early December.
Netflix has four business days, or until Wednesday, March 4th at 11:59pm ET, to submit a new proposal to salvage the contract.
WBD said in a statement on Thursday: “After the end of this fiscal year, WBD will have the right to terminate the Netflix Merger Agreement if the Board of Directors, in consultation with its independent financial and legal advisors, determines in good faith that the PSKY proposal continues to constitute a ‘commercial advantage proposal’ after considering Netflix’s proposed amendments to the terms of the Netflix Merger Agreement.”
As it stands, the Warner Bros. Discovery and Netflix deal remains in effect, and the WBD Board continues to recommend in favor of the deal, which will be voted on on March 20th.
Paramount Skydance CEO David Ellison issued a statement Thursday following WBD’s announcement, saying, “We are pleased that the WBD Board of Directors has unanimously affirmed the excellent value of our proposal, which provides excellent value, certainty and speed to closing for WBD shareholders.”
Netflix co-CEO Ted Sarandos is believed to be in Washington, D.C., today to lobby Trump administration officials about the deal. Amid a difficult domestic political environment, the Netflix-WBD deal has become a lightning rod for critics. The streaming giant will come under unprecedented scrutiny in Washington, D.C., as the Justice Department launches a regulatory review and promises to investigate every aspect of Netflix’s business.
In a statement, Warner Bros. cited elements of the revised Paramount Skydance bid that turned the tables.
Increased acquisition price to $31 per share in cash. The start of the $0.25 daily “ticking fee” per quarter will be brought forward from January 30, 2026, until the Paramount deal closes, instead of starting in January. Increases regulatory break-up fees to $7 billion if a deal is not completed due to regulatory issues. Reaffirms that WBD will pay the $2.8 billion termination fee required to be paid to Netflix to terminate the existing Netflix Merger Agreement; Reaffirms that it will eliminate WBD’s potential $1.5 billion in financing costs associated with the proposed debt exchange; Agree to an obligation to contribute additional equity funds to the extent necessary to support the certificate of solvency required by PSKY’s lending banks; and agree to the definition of “materially adverse to the Company” prior to the closing of WBD’s linear If the network drops faster than expected, the price will not be lowered.
Netflix’s deal, which includes the acquisitions of Warner Bros. and HBO Max, is worth nearly $83 billion. Paramount’s latest bid was a $108 billion all-cash offer for all of WBD, including its linear cable channels. By adding $1 to the per-share price to bring it to $31 per share, Paramount’s offer, filed on February 24th, becomes a bid of approximately $111 billion, including the $33 billion in debt that WBD currently carries on its books.
