Warner Bros Discovery (WBD) is back in talks with Paramount Skydance. They’ve given Paramount until February 23 to submit its best and final offer—one that needs to beat the current $30-a-share deal with Netflix.
So far, WBD has remained loyal to its agreement with Netflix, rejecting multiple sweetened offers from Paramount. This situation has pushed Paramount to attempt a $108.4 billion takeover directly through WBD’s shareholders.
Recently, a Paramount rep hinted they might increase their offer by $1 if talks resumed. WBD emphasized that, while they are open to discussions, they still believe their deal with Netflix is superior.
To initiate talks with Paramount, WBD received a special waiver from Netflix. This allows them to explore alternative bids, but only if the board thinks it could lead to a better offer. Netflix has expressed confidence in their current agreement, saying it offers the most value and certainty.
Ross Benes, a senior analyst at eMarketer, said, “WBD wants to put an end to the back-and-forth with Paramount. Setting a final offer date should speed things along.” He noted that the current bids are already quite high and that significant increases may be rare.
Under the Netflix deal, valued at $82.7 billion, Netflix would gain significant assets from WBD, including Warner Bros, known for hit franchises like Harry Potter and Batman. However, the global networks, including CNN and Discovery Channel, will not be part of the Netflix arrangement; these will become a separate entity for WBD investors.
Last week, Paramount sweetened its offer, agreeing to cover a $2.8 billion fee to Netflix if the deal falls through. They also proposed a $650 million quarterly “ticking fee” if the acquisition isn’t finalized by the year’s end. Additionally, they’ve bolstered their political lobbying by hiring Rene Augustine, a former attorney in the Trump administration, as their senior vice president of global public policy.
On March 20, WBD shareholders will vote on the Netflix acquisition. Meanwhile, Paramount, with a substantial $40 billion personal guarantee from Oracle founder Larry Ellison, plans to nominate new members to WBD’s board to challenge the Netflix deal.
This scenario highlights the cutthroat nature of the streaming industry, where companies vie for control of valuable entertainment assets. As deals unfold, industry experts will be watching closely to see how these negotiations reshape the landscape of digital content.
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