The future of entertainment giant Warner Bros. Discovery (A) is now the subject of a high-stakes corporate contest. Two distinct acquisition proposals are on the table, creating a complex strategic dilemma for the company’s board. The situation has reached a critical juncture, with an exclusive negotiation window set to expire today, February 23, 2026, intensifying the pressure for a definitive resolution.
Competing Visions for an Entertainment Titan
The competing bids present fundamentally different approaches. One consortium, led by Paramount Skydance, is pursuing a hostile takeover of the entire Warner Bros. Discovery corporation. Their current cash offer values the company at $108.4 billion, or $30.00 per share. Sources indicate that preliminary discussions have suggested a potential increase
In contrast, Netflix has secured a signed and binding agreement, but for only a portion of the business. Their deal, valued at a total of $82.7 billion, equates to $27.75 per share in cash. This transaction is specifically for the studio and streaming divisions, not the full conglomerate.
Strategic Maneuvers and Financial Scrutiny
Netflix has moved to defend its position aggressively. Over the weekend, Co-CEO Ted Sarandos publicly stated at the BAFTA gala that for Paramount to prevail, it must simply present a superior offer, emphasizing Netflix’s already-signed agreement.
Furthermore, Netflix has launched a critique of the rival bid’s financial viability. The streaming leader argues that a merger structured around Paramount would burden the combined entity with a total debt load of $84 billion. To manage this, Netflix contends that estimated cost savings of $16 billion would be necessary, raising questions not just about the purchase price but about the overall feasibility and security of the deal.
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Sweeteners, Industry Backlash, and the Board’s Stance
Paramount Skydance is attempting to enhance its proposal with additional financial guarantees. These include a quarterly “ticking fee” of $0.25 per share should regulatory approvals be delayed beyond December 31, 2026. The consortium has also offered to cover the $2.8 billion breakup fee that would be triggered if the existing Netflix deal were terminated.
Meanwhile, the proposed Netflix transaction is facing criticism from within the film industry. Prominent director James Cameron criticized the deal in a letter to a U.S. senator, labeling it a risk to the theatrical experience. He specifically objected to Netflix’s proposed 17-day theatrical window, advocating for a minimum of 45 days.
Despite the competing offer and external commentary, the Warner Bros. Discovery board remains aligned in its recommendation. Although the mandatory U.S. Department of Justice antitrust waiting period under the Hart-Scott-Rodino Act expired on February 19, the board continues to unanimously recommend the Netflix transaction to shareholders.
The path forward is now clearly defined. The seven-day negotiation period Netflix granted for talks with Paramount concludes today. A binding shareholder vote on the Netflix deal is scheduled for March 20, 2026.
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