Paramount Skydance Bid Deemed Superior to Netflix Deal by WBD Board

The takeover battle for Warner Bros. Discovery has intensified after the company’s board determined that a revised bid from Paramount Skydance now qualifies as a “superior proposal” to its existing merger agreement with Netflix. The decision triggers a four-business-day window for Netflix to counter the offer in an effort to preserve its nearly $83 billion pact with WBD.

Under the terms of the merger agreement struck in early December, Netflix has until Wednesday, March 4 at 11:59 p.m. ET to submit a revised proposal. During that period, WBD is permitted to engage with Netflix and evaluate any potential improvements to the deal. If, at the conclusion of the go-shop window, the board determines that Paramount Skydance’s bid continues to represent a “company superior proposal,” WBD would be entitled to terminate the Netflix agreement.

“Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a ‘company superior proposal,’ WBD would be entitled to terminate the Netflix merger agreement,” the company said in a statement Thursday.

For now, the Netflix agreement remains in effect, and the WBD board continues to recommend that shareholders vote in favor of the deal at a scheduled March 20 meeting. That transaction would combine Netflix with Warner Bros. and HBO Max assets in a consolidation valued at nearly $83 billion.

Paramount Skydance CEO David Ellison welcomed the board’s determination, stating, “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty, and speed to closing.”

The revised Paramount Skydance bid significantly sweetened both financial and structural terms. The group raised its purchase price to $31 per share in cash, up from $30, and accelerated the start of a 25-cent-per-quarter “ticking fee” to begin after September 30, 2026. It also increased the regulatory breakup fee to $7 billion if the deal fails to close due to government intervention, offering shareholders greater downside protection.

Additionally, Paramount Skydance reaffirmed its commitment to cover the $2.8 billion termination fee WBD would owe Netflix if it exits the current agreement. The bidder also pledged to eliminate WBD’s potential $1.5 billion financing cost tied to a debt exchange offer and agreed to contribute additional equity if required to satisfy solvency conditions demanded by lenders. Importantly, it accepted a “Company Material Adverse Effect” definition that would prevent a reduction in price if WBD’s linear television networks decline faster than anticipated before closing, a key issue amid ongoing cord-cutting pressures.

Financially, the gap between the two deals is substantial. While Netflix’s agreement is valued at approximately $83 billion and focuses on Warner Bros. and streaming assets, Paramount Skydance’s latest all-cash proposal encompasses the entirety of WBD, including its linear cable networks. The $31-per-share offer equates to roughly $111 billion when factoring in the company’s $33 billion debt load, significantly exceeding the Netflix transaction.

The regulatory landscape adds another layer of complexity. Netflix co-CEO Ted Sarandos is reportedly in Washington, D.C., as scrutiny intensifies. The Justice Department has launched a review expected to examine multiple aspects of Netflix’s business, exposing the streaming giant to a level of regulatory examination it has not previously faced. In an increasingly charged political environment, the proposed merger has become a flashpoint among critics concerned about market concentration and media influence.