Warner Bros Discovery is sticking with Netflix, as the streaming giant prepares an all-cash offer to seal its $83 billion acquisition. The decision reinforces WBD’s rejection of a rival $108.4 billion bid from Paramount Skydance, which the WBD board has officially labeled “inadequate” despite the higher price tag.
The core issue lies in the financing. Paramount’s hostile bid relies heavily on debt, a strategy WBD leadership views as risky. In contrast, Netflix’s shift to an all-cash offer provides immediate, guaranteed value to shareholders. This stability is seen as superior to the uncertainty of Paramount’s leveraged buyout, even with Larry Ellison’s $40 billion personal guarantee.
Netflix’s offer targets WBD’s studio and streaming divisions, leaving out linear networks like CNN and Discovery. This separation allows WBD shareholders to cash out on the premium content assets while retaining equity in the traditional TV business. The deal was originally agreed to in December but is being modified to ensure a faster closing.
The merger faces external threats beyond Paramount. Politicians and industry leaders are pushing back against the consolidation, fearing a monopoly that controls nearly half the streaming market. These concerns have added a layer of political risk to the transaction, making a swift, simple cash deal even more appealing to the companies involved.
Investors seem to agree with WBD’s assessment. Shares rose following the news, indicating that the market values the certainty of Netflix’s cash over the potential pitfalls of Paramount’s debt. The saga underscores that in mega-mergers, the structure of the money often matters just as much as the amount.