Warner Bros. Discovery’s board is weighing whether to reopen the sale of the media giant after an unsolicited sweetener from Paramount’s David Ellison led bidding five days ago. Accepting Paramount’s revised offer would automatically trigger a sizable termination fee – Warner would have to pay Netflix about $2.8 billion to walk away from the $83 billion agreement it already has with the streaming giant.
Paramount Skydance’s bid, which values Warner Bros. Discovery at $30 per share – roughly $108.4 billion including debt – pledges to cover that breakup fee. The offer also includes a 25‑cent per‑share “ticking fee” that would pay Warner roughly $650 million per quarter if the merger doesn’t close by the end of 2026, and a commitment to “backstop” an additional $1.5 billion penalty associated with an outstanding debt‑exchange that is part of the Netflix transaction. Ellison’s group – backed by his billionaire father, Larry Ellison, Middle‑Eastern sovereign wealth funds and U.S. private‑equity firms – argues its offer presents fewer regulatory hurdles and has promised to reimburse Warner for any delays.
Warner’s board has so far stuck to the Netflix agreement. It notes that walking away from the existing deal would expose the company to more than $4.7 billion in liabilities: the $2.8 billion breakup fee to Netflix, a $1.5 billion debt‑exchange penalty and roughly $350 million in incremental interest payments, effectively reducing Paramount’s “termination fee” to just $1.1 billion. By contrast, the Netflix tie‑up comes with a single $5.8 billion breakup fee and does not saddle Warner with the extra debt‑exchange cost. Netflix announced its deal in December 2025, valuing Warner’s enterprise at about $82.7 billion and expecting closure within 12–18 months.
Both combinations would need clearance from the U.S. Department of Justice. Paramount argues its proposal would not create a streaming monopoly, whereas critics warn that merging Netflix and Warner’s studios would dominate the subscription market. Should Warner’s board determine that Paramount’s bid “could reasonably be expected to result in a superior proposal,” Netflix would have the contractual right to match or exceed it, potentially sparking a bidding war. The uncertainty has already stirred shareholder activism, Ancora Holdings has built a roughly $200 million stake and signaled opposition to the Netflix deal, yet fewer than 2 percent of shares have been tendered to Paramount’s offer, which expires March 2. With regulatory scrutiny looming and investors divided, Warner’s directors face a high‑stakes calculus over whether Paramount’s richer, riskier offer outweighs the certainty of the Netflix pact.
