The contest for control of Warner Bros. Discovery’s (WBD) prized entertainment assets has entered a critical new phase. A rival bidding group has significantly strengthened its proposal, introducing the formidable financial backing of Oracle founder Larry Ellison. This development places Netflix’s own strategic acquisition ambitions under considerable pressure, as the competing offer directly addresses previous weaknesses.
A Powerful New Guarantee
The consortium led by Paramount Skydance has substantially raised the stakes. The pivotal enhancement involves a personal guarantee from Larry Ellison to provide $40.4 billion in equity financing, a move designed to eliminate prior concerns about the deal’s feasibility. The revised bid now proposes $30 per share in cash for WBD and includes a termination fee that has been increased to $5.8 billion. This penalty clause notably exceeds the $2.8 billion break-up fee associated with the potential failure of Netflix’s competing proposal.
Netflix Secures Its Own War Chest
Despite this aggressive countermove, Netflix continues to advance its plans. The streaming giant has secured new bank financing commitments totaling $25 billion to facilitate the integration of the desired streaming and studio operations. Although the Warner Bros. Discovery board continues to recommend acceptance of Netflix’s all-encompassing offer, valued at approximately $82.7 billion, the concrete financing from Ellison forces Netflix into a defensive posture. Management now faces a choice: improve its own terms or prepare for a protracted shareholder approval process.
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Market Reaction and Shareholder Skepticism
Financial markets responded immediately to the shifting landscape. Shares of WBD advanced 3.5 percent to $28.75, bringing them closer to the competing cash offer, while Netflix stock traded slightly weaker at $93.00. However, not all major investors are convinced by the new financial muscle. Harris Associates, the fifth-largest shareholder in WBD, acknowledged the Paramount offer as a “necessary” improvement but maintained it remains “insufficient” to surpass the strategic rationale of a combination with Netflix.
For Netflix, the long-term industry leadership position is at stake. Successfully acquiring WBD’s assets would grant the company ownership of the HBO content library and iconic franchises like Harry Potter and Batman. In an industry where scale is increasingly vital, direct control over such premium intellectual property would create a durable competitive advantage, far surpassing a licensing model.
The Countdown Begins
Investors are now focused on January 21, 2026, the extended deadline for the Paramount consortium’s offer. The previous day, January 20, Netflix is scheduled to release its quarterly earnings. CEO Ted Sarandos is expected to use this platform to articulate clearly why acquiring these assets holds greater long-term value than the rival’s immediate cash proposition. In the near term, Netflix shares must defend the technical support zone between $92 and $93 to affirm market confidence in management’s capital allocation strategy.
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