In a dramatic shift for the media landscape, Warner Bros. Discovery Inc. (WBD) is now poised for a transformative merger after its board favored a revised bid from Paramount Skydance over an existing arrangement with Netflix. The streaming giant has subsequently withdrawn from negotiations, clearing a potential path for one of the most significant media consolidations in recent memory. However, significant hurdles remain before the deal is finalized.
Netflix Exits, Citing Price Discipline
The board of Warner Bros. Discovery declared on Thursday that the updated proposal from Paramount Skydance was superior. Netflix, granted a customary four-day period to counter the offer, chose instead to exit talks entirely.
Company officials at Netflix attributed the decision to financial discipline, stating that matching Paramount Skydance’s terms would render the transaction unattractive from a valuation perspective. This move terminates an agreement Netflix had initially brokered in December, which at the time had superseded Paramount’s earlier efforts.
Equity markets responded with modest pressure on WBD shares, which traded at €23.94 on Friday, reflecting a decline of 1.99 percent.
Deal Terms: A $111 Billion Proposal with Substantial Protections
Paramount Skydance’s cash offer values Warner Bros. Discovery at $31 per share. The total enterprise value of the proposed acquisition is approximately $111 billion, which includes the absorption of WBD’s sizable debt burden, estimated at around $33 billion.
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The contractual framework includes notable protective measures for WBD. Paramount Skydance has incorporated a “ticking fee,” a form of incremental compensation that would activate after a specified date following September 30, 2026. Furthermore, the package contains a substantial $7 billion regulatory break-up fee, payable to WBD should the merger fail to gain necessary antitrust approvals. Additionally, Paramount has agreed to cover the $2.8 billion termination fee WBD would owe Netflix for dissolving their previous agreement.
The transaction is structured as a full acquisition. Paramount Skydance would gain control over all WBD divisions, encompassing its film and television studios, the HBO brand, its streaming platforms, and cable networks including CNN, TBS, TNT, Discovery, and HGTV.
Quarterly Results and the Road Ahead
Amid the takeover developments, Warner Bros. Discovery released its quarterly earnings. The company reported a 5.7% year-over-year decline in Q4 2025 revenue, which totaled $9.46 billion. It posted a net loss per share of $0.10, wider than the anticipated loss of $0.02 per share. A positive note was an EBITDA performance that exceeded market forecasts, though investor sentiment remained cautious following the broader report.
Attention now turns to a stringent timeline. WBD shareholders are scheduled to vote on the proposed merger on March 20. The involved parties must also promptly publish detailed merger terms, and WBD’s board must formally ratify the termination of the Netflix agreement.
Subsequently, the deal will face its most critical test: an extended regulatory review process expected to last several months. California Attorney General Rob Bonta has already signaled potential scrutiny, emphasizing that approval for a combined “Paramount/Warner Bros.” entity is not a foregone conclusion.
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