Paramount Submits Increased Offer For Warner Bros. Discovery, Talks To Continue

Paramount has raised its offer for Warner Bros. Discovery, and WBD is set to continue discussions with the studio as a result. As noted, Warner Bros. Discovery announced last Tuesday that it was re-opening talks with Paramount Skydance, giving them seven days to make their “best and final offer.” Paramount has been in a hostile bid to try and acquire the company, who signed an $82.7 billion deal to be acquired by Netflix. Netflix had granted a waiver to allow WBD to talk with Paramount over the past week.

Paramount has submitted its bid, and the deal has been sweetened enough that WBD is considering it. As NBC News reports, the new deal from Paramount has increased its offer from $30 per share to $31 per share. That updated offer puts it further above Netflix’s $27.75 per share deal in terms of pure monetary value, though Netflix’s deal does not include WBD’s networks, which would be split off into its own company.

WBD issued a press release, noting that PSKY’s bid could potentially be preferable to Netflix’s, though they are not yet changing their recommendation in favor of the Netflix deal which remains in effect for now. They did note that Paramount’s offer “could reasonably be expected to lead to a ‘Company Superior Proposal'” and that they will engage further with Paramount Skydance to determine if that is the case. It specifies:

“There can be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive agreement or transaction will result from WBD’s discussions with PSKY. The Netflix Merger Agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and is not withdrawing or modifying its recommendation.”

In addition to the increased price, the revised Paramount offer includes several bells and whistles. They include a “daily ticking fee” equal to $0.25 per share per quarter beginning after September 30, 2026, which is essentially additional money paid to WBD should the deal not close by that point. It also includes a $7 billion fee that can be paid to WBD should the transaction not close due to regulatory issues, and payment of $2.8 billion termination fee that WBD will have to pay to Netflix to terminate the existing deal.

To be clear, even if WBD accepts the new Paramount deal as superior, it’s not over. Netflix has four days after any such determination to choose to propose their own counteroffer. Whether Netflix will do so is not entirely clear at this time; they reportedly have the means to do so, but Netflix co-CEO Ted Sarandos told Variety over the weekend:

“Let’s not get ahead of that process [the Paramount/WBD negotiations] … But the core of it is, you know, we’re super-disciplined buyers, as you probably know we have a reputation for such so that I’m willing to walk away and let someone else overpay for things. We have a rich history of that.”

Paramount said in a statement following WBD’s announcement, “Paramount welcomes WBD Board’s determination and looks forward to continuing to engage constructively with WBD to deliver the benefits of Paramount’s proposal to WBD shareholders, the creative community and consumers.”

AEW is of course a broadcast partner of WBD. It was revealed in filings that AEW would stay with Discovery, aka the spinoff Global Linear Networks, should the Netflix deal go through. AEW’s weekly series and PPVs are expected to stay on HBO Max.