Netflix has converted its $72 billion offer for Warner Bros. Discovery into an all-cash transaction, intensifying the tug-of-war with Paramount Skydance for control of the entertainment giant.
At a Glance
- Netflix revises deal to all-cash at $27.75 per Warner Bros. share
- Paramount Skydance counters with $40.4 billion equity pledge backed by Larry Ellison
- Warner board backs Netflix, calling Paramount’s plan a risky leveraged buyout
- Why it matters: The victor will reshape Hollywood’s streaming and studio landscape
The revision keeps the per-share price at $27.75 but eliminates stock components, giving Warner shareholders a clearer valuation and faster path to a vote, both companies said Tuesday. The transaction’s enterprise value remains $82.7 billion including debt.
Key Deal Terms
- Cash offer: $27.75 per Warner Bros. share
- Extra payout: Warner holders also receive Discovery Global shares after the unit spins off
- Breakup fee: $5.8 billion if regulators block the deal-matching Paramount’s promise
Netflix shares rose 1.3% in pre-market trading; Warner Bros. Discovery slipped slightly.
Paramount Fights Back
Paramount Skydance refused to cede ground. Last week it announced its own slate of director nominees for Warner’s upcoming shareholder meeting and revealed an “irrevocable personal guarantee” from Oracle founder Larry Ellison-father of Paramount CEO David Ellison-to back $40.4 billion in equity financing.
Warner’s board again urged investors to reject Paramount, labeling the bid a highly leveraged buyout laden with debt and operating restrictions that could “hamper WBD’s ability to perform” during regulatory review.
What Each Suitor Wants
| Netflix | Paramount Skydance |
|---|---|
| Warner’s studio & streaming assets only (HBO Max, TV/film production) | Entire company-studio, streaming, CNN, Discovery networks |
| Plans spin-off of news & cable into separate firm | Keeps all operations intact |
A merger of either stripe faces at least a year of regulatory scrutiny. The U.S. Justice Department is expected to review the mega-deal and could sue to block or demand changes. Overseas regulators may also challenge the transaction, and political winds under President Donald Trump-who has mused about personal involvement-add another layer of uncertainty.
Industry Opposition
Labor groups are weighing in. SAG-AFTRA and the Writers Guild of America issued statements opposing the Paramount proposal, though the articles did not detail specific objections.
Key Takeaways
- Netflix’s all-cash revision aims to lock in shareholder support before Warner’s vote
- Paramount counters with richer equity guarantees and director nominees
- Regulatory hurdles loom large for whichever bid prevails
- Warner leadership views Netflix’s path as less risky and faster to close
The battle for Warner Bros. Discovery now shifts to shareholders, who must decide between Netflix’s streamlined cash offer and Paramount’s broader, debt-heavier vision for the company.
