Warner Bros. Discovery Officially Rejects Latest Bid From Paramount Skydance

In an official announcement today, the Board of Directors for Warner Bros. Discovery informed shareholders that the board has unanimously determined that it will not be accepting the latest offer from Paramount Skydance to acquire WBD. Paramount Skydance previously submitted an amended offer on December 22, 2025.

According to the letter, the Board of Directors determined that the amended offer is not in the best interests of WBD and its shareholders and does not meet the criteria of a “Superior Proposal” under the terms of WBD’s merger agreement with Netflix, Inc., which was announced on December 5, 2025.

WBD claims that the amended offer remains inferior to the earlier Netflix merger agreement across “numerous key areas.” Also, the value is seen as insufficient given high costs, risks, and uncertainties. Also, WBD cites a “heightened risk of failure to close” compared to the Netflix agreement and “significant potential consequences for shareholders if Paramount Skydance’s offer fails to close.”

The letter goes on to read that WBD Board of Directors Chair Samuel A. Di Piazza, Jr. states, “The Board unanimously determined that Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas. Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. He continued, “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.”

Some important passages to note from the letter are as follows, including the letter spelling out why WBD sees Paramount’s amended offer as inferior to the one from Netflix, along with the costly termination fee of Netflix versus Paramount:

PSKY’s offer is inferior given significant costs, risks and uncertainties as compared to the Netflix merger. Under the Netflix merger agreement, WBD shareholders will receive significant value with $23.25 in cash and shares of Netflix common stock representing a target value of $4.50 based on a collar range in the Netflix stock price at the time of closing, which has future value creation potential.

Additionally, WBD shareholders will receive value through their ownership in Discovery Global, which will have considerable scale, a diverse global footprint, and leading sports and news assets, as well as the strategic and financial flexibility to pursue its own growth initiatives and value-creation opportunities.

The Board also considered the costs and loss of value for WBD shareholders associated with accepting the PSKY offer. WBD would be obligated to pay Netflix a $2.8 billion termination fee for abandoning our existing merger agreement; incur a $1.5 billion fee for failing to complete our debt exchange, which we could not execute under the PSKY offer without PSKY’s consent; and incur incremental interest expense of approximately $350 million. The total cost to WBD would be approximately $4.7 billion, or $1.79 per share. These costs would, in effect, lower the net amount of the regulatory termination fee that PSKY would pay to WBD from $5.8 billion to $1.1 billion in the event of a failed transaction with PSKY. In comparison, the Netflix transaction imposes none of these costs on WBD.

For now, WBD appears to be moving forward with its earlier Netflix merger agreement, which includes Warner Bros. Pictures, IP, and assets, and HBO Max. It would not include WBD’s linear television networks.

Warner Bros. Discovery Is the Main Broadcast/Streaming Partner of AEW

Of course, WBD is AEW’s main broadcast and streaming partner. AEW Dynamite airs on WBD’s TBS Network, and AEW Collision airs on TNT. Also, AEW’s weekly programming is simulcast on WBD’s HBO Max streaming platform, with live pay-per-view events also available on the streamer.

AEW signed a multi-year media rights agreement with WBD that was announced last year. The deal is expected to run through 2027, with a potential option for a fourth year.

Meanwhile, Netflix is home to WWE Raw in the U.S. every week, and it’s WWE’s main streaming partner globally. Earlier this week, Netflix and WWE announced a new expanded partnership, making Netflix the new home of the WWE library in the U.S.

Netflix is not looking to acquire WBD’s television networks as part of its merger agreement. Also, any potential merger would likely face significant government regulation, so it will likely not affect the current AEW media rights deal in its current duration.