Warner Bros Urges Shareholders to Reject Paramount’s $108BN Offer: Netflix to Get the Deal
- It's the second time in less than a month that Warner Bros said "no" to Paramount. - Paramount's $108 billion deal is clearly risky due to excessive debt and no clear contractual protections. - Netflix now sounds paramount to Warner Bros, and could be it this time around.
Warner Bros. Discovery is in discussions with two major companies about potential acquisitions. Netflix is almost there, as Warner Bros. ’ board of directors is asking shareholders to reject Paramount's offer outright. Netflix only wanted Warner Bros.' film and streaming businesses (for $72 billion (£54 billion) and the company was ready to split its company into two parts. In comparison, Paramount wanted the entire company for $108 billion. This includes movie studios, streaming services, TV channels such as CNN and TNT, Discovery channels, and Free-to-air TV channels in Europe. Here's what's wrong with Paramount's offer. Learn more.
Why Does Warner Bros Think Paramount’s Deal Is Risky?
According to Warner Bros, Paramount’s offer is “inferior" and has lots of risks involved. And interestingly, it's the second time in less than a month that the company said "no" to Paramount. Not just that, Paramount has been rigid about the issues and came back without any change:
- It's too much debt considering that Paramount itself is worth only $14 billion.
- The company would need over $94 billion in financing to make the offer a reality. Hence, the deal is financially risky and uncertain.
- If the deal reaches a level and Paramount can’t raise all that money, then the deal is a failure.
- On top of that, Paramount wasn't clear or included sufficient protections if the deal doesn’t go through.
Warner Bros to Stick With Netflix’s Offer
Netflix almost got the deal (in the past). If Warner Bros decides to drop, then the company has to pay a penalty of $2.8 billion (to Netflix as a breakup fee). Moreover, the deal is feasible, lower-risk, and has put great money on the table. Hence, the board green-lighted to keep Netflix’s offer.
What Did Warner Bros Say About the Netflix vs Paramount Deal?
"Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount's offer would impose on our shareholders," said the chair of the Warner Bros board of directors, Samuel Di Piazza Jr., in a statement.
Final thoughts...
The discussion is nearly complete (it has been quite a topic since December, 2025). It's pretty clear that Warner Bros wants Netflix's $72 billion (£54 billion) offer as it's less risky and much more feasible. Paramount would have to either back out altogether, make a better offer, or it might just be it. We'll have to wait and watch.
Nitin Konde
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