> At a Glance
> – Warner Bros. Discovery unanimously rejected Paramount Skydance’s $108.4 billion offer
> – Board warns the bid would load $87 billion in debt onto the company
> – Instead urges shareholders to accept Netflix’s $82.7 billion cash-and-stock deal
> – Why it matters: The choice could decide who controls iconic franchises like Harry Potter, Game of Thrones, and DC Comics
Warner Bros. Discovery’s board has drawn a hard line in the bidding war for its film and TV assets, telling investors that Paramount’s higher price tag carries “materially more risk” than Netflix’s lower but better-financed proposal.
Paramount’s Offer Rejected
The $108.4 billion all-cash bid from Paramount Skydance was branded a “leveraged buyout” by Warner Bros. directors. They calculate the deal would require $94.65 billion in combined debt and equity-almost seven times Paramount’s own $14 billion market value.
Board members fear the borrowing spree would:
- Push Paramount deeper into junk credit territory
- Worsen its already-negative free cash flow
- Threaten the deal’s completion if credit markets tighten
> WBD statement:
> “This aggressive transaction structure poses materially more risk for WBD and its shareholders when compared to the conventional structure of the Netflix merger.”
Netflix’s Competing Play
Netflix’s $82.7 billion offer mixes cash and stock and comes from a partner with:
- A $400 billion market cap
- An investment-grade balance sheet rated A/A3
- Projected $12 billion in 2026 free cash flow
Warner Bros. argues these metrics make the Netflix pact safer and more likely to close. Netflix welcomed the endorsement, saying the tie-up would “bring together highly complementary strengths and a shared passion for storytelling.”
Timeline of Events
| Date | Action | Value |
|---|---|---|
| Early December | Paramount’s first unsolicited bid | $30/share |
| Revised offer | Larry Ellison backs $40B equity | $108.4B total |
| Current recommendation | Board endorses Netflix deal | $82.7B total |
Key Takeaways
- Warner Bros. board favors certainty over headline price, backing Netflix’s lower but better-funded offer
- Paramount would need to raise $54 billion in fresh debt on top of $40 billion equity pledged by the Ellison family
- Shareholder vote set to decide between rival visions for the future of DC Comics, Harry Potter, and Game of Thrones franchises
With both suitors now on record, investors must decide whether the biggest media asset sale of the decade hinges on dollars-or durability.
