Why Warner Bros Discovery Rejected Paramount’s Higher Bid in Favor of Netflix’s Deal

The media landscape experienced a dramatic escalation in the contest to acquire Warner Bros. Discovery in December 2025. After WBD agreed to be acquired by Netflix in a $82.7 billion enterprise ($72.0 billion in equity value) deal on December 5, Paramount Skydance responded on December 8 with a hostile takeover bid valued at $108.4 billion [1][2][7]. The Paramount offer proposed $30 per share all‐cash for the entire company—cable networks included—while Netflix had focused on the studios, streaming wings, and HBO brands, excluding those linear businesses [1][2][7].

Paramount’s hostile bid aimed to appeal directly to shareholders, bypassing the board’s recommendation. To address early criticism over financing certainty, the offer was amended: Larry Ellison made a personal guarantee of $40.4 billion toward equity backing, and the reverse termination fee was raised to match Netflix’s at $5.8 billion. Paramount asserted that its offer provides superior value and a faster path to close [4][5][7].

Nevertheless, the board of WBD judged Netflix’s negotiated merger offer to be more reliable and binding. Netflix’s deal—though lower per share ($27.75 equity value)—was supported by clear, committed debt and no contingencies about financing or share collateral. The board also valued the separation of Discovery Global, the cable networks, underwriting greater flexibility and strategic value for shareholders [2][3][5]. Paramount’s offer was rejected by the board on grounds of perceived opacity, risk, and lack of solid guarantee from Ellison’s family trust [5][6].

Strategically, this bidding duel underscores shifting dynamics in media & entertainment: content library ownership is a critical asset; distribution platforms and streaming power are central competitive levers; and financial credibility—especially in large, asset‐dense deals—is as important as headline price. Regulatory risk and execution risk are deciding factors in whether a deal carries weight.

Key open questions include whether WBD shareholders will defy the board recommendation and tender to Paramount anyway; how antitrust and media regulatory agencies in the U.S. and abroad will evaluate either deal’s impact; and how Discovery Global’s future valuation and separation will affect long‐term shareholder returns regardless of which deal prevails.