In a dramatic realignment of the Hollywood landscape, Paramount Skydance has emerged victorious in a high-stakes bidding war for Warner Bros. Discovery, successfully derailing a rival acquisition attempt by Netflix. According to a report from Reuters, Warner Bros. Discovery (WBD) has entered into a definitive agreement to be acquired by Paramount Skydance in a deal valued at $110 billion, finalized early Friday morning.
The WBD board of directors recently determined that the revised offer from Paramount Skydance constituted a “superior proposal” compared to the initial $82.7 billion bid from Netflix. While Netflix was given the opportunity to counter the offer, the streaming giant ultimately chose to retreat. On Thursday, Netflix officially declined to raise its price, effectively conceding the acquisition to Paramount.
“The agreement we initially structured would have delivered significant value to shareholders with a straightforward path to regulatory clearance,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “However, we maintain a disciplined approach to capital allocation. At the valuation required to compete with Paramount Skydance’s latest bid, the transaction no longer meets our criteria for financial attractiveness.”
The financial logistics of the merger are immense. Paramount is now responsible for a $2.8 billion termination fee owed to Netflix as a result of WBD backing out of their prior arrangement. Additionally, Paramount has increased its regulatory protection fee to $7 billion—up from $5.8 billion—should the deal fail to pass antitrust scrutiny. The $110 billion price tag includes the assumption of $29 billion in existing debt, suggesting that the newly combined Paramount-Skydance-WBD entity will likely face significant restructuring to optimize costs.
When Netflix and Warner Bros. first announced their intent to merge in December, the deal was set to hand Netflix the keys to a legendary library of intellectual property. This included the DC Universe, the Harry Potter franchise, HBO, and the Max streaming service, along with the 102-year-old film studio and its gaming division. Notably, Netflix’s plan excluded WBD’s traditional linear TV networks.
In contrast, the Paramount Skydance acquisition is all-encompassing, including those TV networks. The bid is heavily supported by the Ellison family—David Ellison leads Paramount, while his father, Oracle founder Larry Ellison, provides significant financial backing—alongside RedBird Capital. The deal also features funding from Affinity Partners, the private equity firm led by Jared Kushner, as well as sovereign investments from Saudi Arabia, Qatar, and the UAE. Given the political and financial weight behind the offer, industry analysts expect the merger to face minimal resistance from regulatory bodies.
Source: Polygon
