Paramount Skydance’s Superior Bid for Warner Bros. Discovery: Netflix Steps Aside

The battle for Warner Bros. Discovery (WBD) has taken a dramatic turn as Paramount Skydance Corporation (PSKY) has presented a revised offer deemed “superior” by the WBD board, prompting Netflix to withdraw from the acquisition race. This development sets the stage for a potential merger that could significantly reshape the entertainment and media landscape.

Paramount Skydance’s Winning Bid

Paramount Skydance has increased its bid to $31 per share for Warner Bros. Discovery, valuing the company at approximately $110.9 billion including debt . This offer surpasses Netflix’s previous proposal of $27.75 per share for a portion of WBD’s assets, specifically the film and television studio Warner Bros. And the streaming platform HBO Max . Paramount Skydance has similarly agreed to cover the $2.8 billion breakup fee that WBD would have owed Netflix had the deal not proceeded .

Netflix’s Withdrawal

Despite initially reaching an agreement in December, Netflix has decided not to match Paramount Skydance’s latest offer. The WBD board notified Netflix on Thursday that Paramount’s bid constituted a “superior proposal.” Netflix co-CEOs Ted Sarandos and Greg Peters stated that while they were disciplined throughout the process, the price required to match Paramount Skydance’s offer was no longer financially attractive . Netflix stock saw a nearly 10% increase in after-hours trading following the announcement .

Atypical Financial Arrangement and Regulatory Hurdles

The acquisition by Paramount Skydance is an atypical financial arrangement, requiring substantial support from Larry Ellison, founder of Oracle and father of Paramount Skydance’s CEO, David Ellison. PSKY is poised to acquire a company six times its market capitalization and will need to assume significant debt to do so .

Paramount Skydance believes its proposal is more likely to gain regulatory approval than Netflix’s bid, a claim contested by Netflix, which accused PSKY of “misrepresenting” the regulatory validation process . The merger will still require approval from federal antitrust enforcers.

WBD’s Performance and Future Outlook

Warner Bros. Discovery reported a 5% decline in turnover for 2025, with the slowdown accelerating to 6% in the fourth quarter . While streaming subscriptions have increased to 131.6 million worldwide, a gain of 14.7 million year-over-year, costs are rising faster than revenue, impacting margins. The company’s traditional television business continues to face declining revenues and profits .

Next Steps

Warner Bros. Discovery has scheduled an extraordinary general meeting for March 20, where shareholders will vote on the future of the group . The outcome of this meeting, and subsequent regulatory approvals, will determine whether Paramount Skydance successfully acquires Warner Bros. Discovery, potentially creating a media powerhouse.