The Warner Bros. Discovery (WBD) board is considering re-engaging with Paramount Skydance about a deal to acquire the entire company. This comes after an $83 billion agreement with Netflix was reached in December.
Paramount Skydance has been persistent, submitting their ninth offer since last year. This latest bid includes a “ticking fee” of about $650 million for WBD shareholders for each quarter until the deal is finalized by December 31, 2026. As of February 10, they made their new proposal to WBD and investors.
Even though WBD has dismissed Paramount’s recent offer, they admit that the sale of the studio and HBO is under intense scrutiny. Investors and media analysts are watching closely, and such significant transactions often lead to shareholder lawsuits. By considering Paramount’s offer again, WBD can show they are fulfilling their responsibility to explore all reasonable proposals.
WBD is expected to announce details of the Paramount Skydance offer soon, along with the date for its Q4 2025 earnings report. Investors are also eager to learn when a special shareholder vote on the Netflix transaction will take place. Netflix, under their previous agreement, can match any superior offer before the acquisition is complete.
In a complicated twist, WBD may pressure Paramount Skydance to finalize their best offer. This would give shareholders the chance to make informed decisions and may also prompt Netflix to improve its bid. WBD’s deal with Netflix encompasses not just Warner Bros. but also HBO Max, while Paramount Skydance aims to acquire the entire WBD portfolio, including popular cable channels like CNN, TNT, and Discovery.
Regulatory review in Washington D.C. could pose challenges for the WBD-Netflix agreement, particularly due to Netflix’s dominance in the streaming industry. There’s also rising concern from smaller investors, echoing past instances like the scrutiny faced by Ancora Capital regarding major deals.
Recent data indicates that media mergers are increasingly under the microscope, highlighting a trend of tighter regulations on big transactions, especially since the Trump administration. In fact, in 2022, 20% of media mergers faced significant government review, underscoring the evolving landscape of media ownership.
As the media landscape continues to change, the outcomes of these negotiations may reshape how we consume entertainment in the future.
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