Warner Bros. Discovery, Inc. (NASDAQ: WBD) finds itself at a crossroads in the fast-evolving media landscape. Formed from the 2022 merger of WarnerMedia and Discovery, the company manages a vast portfolio that spans HBO Max streaming, CNN, and cable networks alongside film production. Paramount Skydance (NASDAQ: PSKY), a smaller rival with CBS, MTV, and Paramount+ streaming, has pursued an aggressive acquisition strategy. Netflix, Inc. (NASDAQ: NFLX), the streaming giant known for original series and global reach, entered the picture with a different kind of proposal. These three players represent distinct paths forward as traditional TV fades and digital competition heats up.
Paramount launched its bid for Warner Bros. Discovery back in late 2025 with a straightforward pitch: $30 per share in all-cash, totaling around $108.4 billion in enterprise value. Led by CEO David Ellison, whose father Larry Ellison brings massive financial clout, the offer aimed to merge Paramounts broadcast assets with Warner Bros studio firepower. By December, Paramount revised the terms to tackle early criticisms. They secured a personal guarantee from Larry Ellison for $40.4 billion in equity and raised the breakup fee to $5.8 billion to match competitors. Sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi backed parts of the debt financing, estimated at $54 billion from banks like Bank of America and Citigroup. Paramount argued this created a vertically integrated powerhouse ready to battle streaming leaders.
Yet Warner Bros. Discovery board saw deeper issues. They framed the deal as a leveraged buyout, where Paramount, smaller by market cap, would pile on over $50 billion in new debt. This setup carried real dangers. Debt markets can shift quickly, and regulatory approvals from bodies like the U.S. Department of Justice loomed large. Even with Ellison family assurances and trust transparency, the board worried about deal collapse risks that could leave shareholders empty-handed. Paramount countered by noting their cash certainty beat mixed deals, but Warner Bros. Discovery prioritized stability over headline numbers.
Contrast this with the existing pact Warner Bros. Discovery struck with Netflix last month. That deal covers Warner Bros. studios and HBO Max assets for $23.25 in cash per share, $4.50 in Netflix stock, and a stake in a spun-off entity called Discovery Global. Discovery Global would house cable channels like CNN and TLC, trading independently after a split planned for this year. Netflix stock comes with a collar to limit downside, though recent trading dipped below that floor, trimming headline value to about $27.42 per share by some estimates. A debt adjustment clause ties proceeds to Discovery Global’s leverage: less debt there means less cash and stock from Netflix, shifting more value to the spun-off shares.
The board views this as lower risk. Netflix brings proven streaming scale, with fewer financing hurdles since it avoids full-company debt loads. Regulators have engaged, but Netflix expressed confidence. Warner Bros. Discovery highlighted Discovery Global’s standalone potential, dismissing Paramount’s $1-per-share valuation as too low. Recent debuts of similar media spin-offs, like Versant Media, showed market appetite despite TV headwinds.
Corporate strategy drove the boards unanimous no. First, risk factors topped the list. Paramount’s debt-heavy structure echoed troubled buyouts past, especially with $15.1 billion net debt targeted for Discovery Global under the Netflix plan. Second, market position mattered. Merging with Paramount risked diluting Warner Bros premium studio brands in a combined entity facing streaming giants. Netflix preserved those assets intact while offloading declining cable. Third, shareholder value tilted toward certainty. The boards letter called Paramount’s revised offer inadequate, even after addressing financing gaps. They bet on Netflix’s execution track record over untested merger synergies.
This choice reflects broader media shifts. Cable viewership dropped 10% yearly as cord-cutting accelerates, pushing firms toward streaming bets.
Paramount now weighs options: walk away, sweeten the bid, or take it straight to shareholders in a hostile push. Netflix deal talks continue amid antitrust reviews. For Warner Bros. Discovery investors, the board signals patience with the current path, betting Discovery Global finds its footing and Netflix integration pays off long-term. Markets watch closely as these moves reshape content wars.
