The battle for Warner Bros. Discovery (WBD) has entered a volatile new phase. Despite being legally committed to an $83 billion merger with Netflix, Bloomberg reports that the WBD board is reconsidering a rival, $108 billion, offer from Paramount Skydance. This pivot comes after David Ellison’s Paramount Skydance added aggressive financial “sweeteners” designed to eliminate the risks of walking away from Netflix.
The Bloomberg report highlights that while the WBD board has previously stood by the Netflix deal, Paramount’s latest “enhanced” hostile bid has forced a re-evaluation. Board members are now deliberating whether this revised proposal—valued at $108 billion—constitutes a “superior deal” that would legally permit them to walk away from their current commitment.
The momentum shifted after Paramount directly addressed the “poison pills” in the Netflix contract. Most notably, Paramount has pledged to pay the $2.8 billion termination fee WBD would owe Netflix, essentially neutralizing the financial penalty for switching partners. Additionally, Paramount introduced a “ticking fee” that pays shareholders $0.25 per share every quarter if the deal is delayed by regulators beyond 2026, shifting the risk of a long antitrust review onto the buyer.
Insiders suggest that reopening talks may also be a tactical move to pressure Netflix. Under their current agreement, Netflix has a “right to match” any superior offer. By engaging with Paramount, WBD’s board may be attempting to force Netflix to raise its $27.75-per-share price to meet or beat Paramount’s $30-per-share all-cash offer.
With a February 25 deadline looming to respond to Paramount’s approach, the WBD board is under intense pressure from activist investors like Ancora Holdings to maximize shareholder value. Whether this leads to a full pivot toward Paramount or a bidding war that forces Netflix to pay more, the landscape of Hollywood is set for a historic transformation.