Paramount vs Netflix: Which Deal Brings More Value to WBD Shareholders?

Gist

Netflix is offering $27.75 per WBD share in a cash-and-stock deal (EV ~$82.7B) for studios and streaming assets, excluding Global Networks, which WBD plans to spin off.
Paramount has launched a hostile all-cash tender at $30 per WBD share (EV ~$108.4B) for the entire company, but its financing has been shaken by the exit of key foreign-backed partners.
Despite Paramount’s higher headline price, WBD’s board favors the Netflix bid for its perceived stronger long-term upside, strategic fit in streaming, and equity participation.
Both transactions face heavy antitrust and political scrutiny in the U.S. and abroad, leaving deal outcomes dependent on regulatory approvals and shareholder responses in the coming weeks.

The race for Warner Bros. Discovery represents a high-stakes clash involving content control, strategic platforms, and shareholder value. Here’s a deeper breakdown:

Deal Structures & Valuations

Netflix’s offer values WBD at an enterprise value of approximately $82.7 billion, with shareholders receiving $23.25 in cash plus $4.50 in Netflix stock per share—$27.75 total. Paramount counters with a straight all-cash offer of $30 per share, valuing WBD at about $108.4 billion assuming full acceptance. [1][3][8]

While Paramount’s offer delivers more immediate cash, WBD’s board appears persuaded by the Netflix deal’s mixed cash and equity structure, which offers upside through Netflix stock and maintains exposure to future growth, particularly from the streaming and studio segments. Paramount’s offer includes all of WBD, including linear networks; Netflix’s excludes the Global Networks segment, which WBD is planning to spin off (Discovery Global). [1][2][7]

Financing, Certainty & Risk

Paramount’s bid is financed via a combination of equity (supported by Larry Ellison, RedBird Capital, and others) and $54 billion in debt from Bank of America, Citi, and Apollo. Key funding partners, including Affinity Partners and Tencent, have departed or reduced involvement, citing regulatory concerns. [13][22]

Netflix’s offer involves complex cash-and-stock mechanics, contingent delivery of stock value via collar provisions, and the spin-out of Discovery Global before closing. While that structure introduces more moving parts and regulatory dependencies, Netflix seems confident in clearing U.S. and international approvals, citing lower overlap with linear TV assets and precedent.[5]

Regulatory & Political Headwinds

Both deals face intense antitrust scrutiny. A merger between Netflix and high-profile studio and streaming assets of WBD raises concerns around market concentration in streaming, content control, and subscriber pricing. U.S. lawmakers like Sen. Elizabeth Warren and Rep. Pramila Jayapal have warned of reduced consumer choice, potential price hikes, and risks to employees. [5][4]

Paramount’s bid has raised red flags around foreign investment: inclusion of non-U.S. investors such as Tencent drew national security concerns; major backers have since walked back. The involvement of people with political connections (Jared Kushner) added scrutiny, especially under regulatory oversight. [22][14][13]

Strategic Implications & Shareholder Outcomes

For WBD shareholders, the trade-off is between immediate cash premium vs. participation in the ongoing growth of the streaming and studios business under Netflix. If Netflix’s equity component appreciates, its upside could potentially exceed Paramount’s cash premium—but only if Netflix executes and navigates regulatory environments successfully.

For Netflix, acquiring HBO, Warner studios, and top franchises like DC, Harry Potter, Game of Thrones expands its content moat drastically, possibly altering competitive dynamics in streaming, theatrical releases, and global content distribution. Paramount, by acquiring all of WBD, would build scale across streaming, linear networks, sports rights and content, but with heavier regulatory risk and leverage burden.

Open Questions

Will Paramount be able to shore up financing and re-address regulatory/foreign investment concerns before the January 8, 2026, tender-offer deadline? [1]
How will antitrust regulators assess competitive overlap, particularly in the streaming market (Netflix + HBO Max), and what concessions might be required? [5]
Can Netflix deliver on promised savings ($2-3 billion annually by year three) and integrate Warner’s creative operations without harming output or cultural brands?[4]
What will be the valuation trajectory of Discovery Global as a standalone entity—how will investors price the linear TV nets being spun off?[2]
How will shareholders respond—will the board’s recommendation in favor of Netflix sway enough votes against Paramount’s simpler all-cash bid? [12][4]

In sum, while Paramount’s bid is more lucrative at face value, Netflix’s offering is viewed by WBD’s board as delivering more blended value over time, especially through exposure to the studios/streaming upside. Regulatory risk and financing robustness are key proximate variables—outcomes rest heavily on how regulators, foreign financiers, and shareholders move over the coming weeks.

Supporting Notes

Netflix’s deal offers $27.75 per WBD share in cash and stock; total enterprise value ~$82.7 billion, equity value ~$72 billion. [1][2][6]
Paramount’s all-cash hostile tender offer is $30.00 per share, valuing all of WBD (including Global Networks) at ~$108.4 billion; includes $54 billion debt commitments. [3][1][10]
Warner Bros. Discovery’s board is expected to recommend shareholders reject Paramount’s offer, favoring Netflix’s deal despite lower cash, citing better long-term value and certainty. [12][4]
Affinity Partners (led by Jared Kushner) and Tencent withdrew or scaled back involvement in Paramount’s bid due to regulatory / foreign investment concerns. [13][22]
Antitrust concerns raised by U.S. senators and regulators; risk around dominance in streaming, content control and consumer pricing. [5][4]
Netflix forecasts $2-3 billion in annual cost savings by year three post-deal, and expects transaction to be accretive to earnings by year two.[4]