The corporate standoff over Warner Bros. Discovery (WBD) has taken another decisive turn — and once again, the board has made its position crystal clear. WBD has officially rejected the latest takeover attempt from David Ellison’s Paramount Skydance, doubling down on its belief that its existing deal with Netflix offers far greater value and stability for shareholders.
In a detailed filing and a strongly worded letter to investors issued on January 7, WBD confirmed that Paramount Skydance’s revised $30-per-share all-cash offer remains “inadequate,” risky, and fundamentally inferior to the Netflix merger already in place.
This marks the eighth takeover bid from Paramount Skydance — and the eighth rejection.
Why WBD Said No — Again
At the heart of WBD’s rejection is a familiar argument: certainty versus risk.
While Paramount Skydance increased its offer on paper, WBD’s board says the proposal still fails to deliver real, reliable value once financing risks, regulatory uncertainty, and potential costs are factored in. According to the board, the Paramount deal looks strong at first glance but quickly unravels under scrutiny.
The board also emphasized that Paramount’s offer is non-binding, meaning it could be changed, reduced, or withdrawn entirely at Paramount’s discretion — even after shareholders tender their shares.
That lack of commitment, WBD says, puts shareholders in a dangerously exposed position.
The Debt Problem That Won’t Go Away
One of the strongest objections raised by WBD involves Paramount Skydance’s financing structure.
In its letter, the board pointed out that Paramount Skydance — a company with an estimated market value of around $14 billion — is attempting to fund a deal that would require nearly $95 billion in debt and equity financing. That would make it the largest leveraged buyout in history, with more than $50 billion in new debt layered on top.
The board described the proposed acquisition as a high-risk leveraged buyout that could take 12 to 18 months to close — if it closes at all. Any shift in market conditions, lender sentiment, or regulatory outlook could derail the deal midway, leaving WBD in limbo.
By contrast, Netflix’s financial strength was highlighted repeatedly.
Netflix vs Paramount: A Stark Contrast
WBD drew a clear line between the two suitors.
Netflix, according to the board, brings:
- A market capitalization of roughly $400 billion
- Investment-grade credit ratings
- Estimated $12 billion in free cash flow for 2026
- A conventional merger structure with fewer operational restrictions
Under the Netflix agreement, WBD shareholders would receive $27.75 per share, combining cash and Netflix stock — with potential upside depending on Netflix’s share performance. Importantly, shareholders would also retain stakes in Discovery Global, following WBD’s planned spin-off of its TV-focused assets.
The board believes this structure offers both immediate value and long-term optionality, without placing the company under extreme financial strain.
The Hidden Costs of Walking Away
WBD also addressed a critical point often overlooked in headline numbers: exit costs.
If WBD were to abandon the Netflix deal in favor of Paramount Skydance and that transaction failed, the financial fallout would be severe. The company would owe:
- A $2.8 billion termination fee to Netflix
- Around $1.5 billion in failed financing costs
- Roughly $350 million in incremental interest expenses
These costs would effectively reduce Paramount’s much-touted $5.8 billion regulatory breakup fee to just $1.1 billion — an amount WBD says wouldn’t come close to compensating shareholders for the damage caused by a failed deal.
Netflix’s agreement, on the other hand, imposes none of these penalties on WBD.
Operational Handcuffs and Strategic Risk
Another major concern raised by the board involves the restrictions Paramount Skydance would place on WBD during the lengthy closing period.
These restrictions could prevent WBD from:
- Refinancing its $15 billion bridge loan
- Executing its planned Discovery Global spin-off
- Renegotiating key business agreements
- Pursuing strategic initiatives
If the deal collapsed after months of restrictions, shareholders would be left with a weakened company that had been unable to act in its own best interests for over a year.
The board described this scenario as “unacceptable.”
The Board’s Final Message to Shareholders
In its closing remarks, the Warner Bros. Discovery board made one thing unmistakably clear: it believes Paramount Skydance has had ample time, guidance, and opportunity to submit a superior offer — and has repeatedly failed to do so.
Despite knowing exactly what WBD required, Paramount continued to submit proposals riddled with the same deficiencies, while insisting none represented its “best and final” offer.
By contrast, the Netflix deal, the board said, maximizes value while minimizing downside risk.
Final Words
This latest rejection reinforces just how committed Warner Bros. Discovery is to its Netflix future. While Paramount Skydance continues its aggressive pursuit, WBD’s leadership sees the Netflix merger as the safer, smarter, and ultimately more rewarding path forward.
For now, the message from WBD is unwavering: the Netflix deal isn’t just better — it’s not even comparable.
