Warner Bros. Discovery Reopening Merger Talks as Paramount’s New Offer Complicates Netflix Deal
Things just got a lot more interesting in the ongoing Warner Bros. Discovery merger saga.
Even though Warner Bros. Discovery and Netflix put out a press release announcing their intended deal, new reports suggest that agreement might not be as locked in as it first appeared.
According to multiple outlets, including Deadline, Warner Bros. Discovery has announced that it plans to enter discussions with Paramount Skydance about a possible merger. They are entering seven days of deal talks with the David Ellison company even as it continues to stand by its agreement with Netflix.
Despite signing on with Netflix, the Ellison family’s latest proposal from Paramount appears strong enough that Warner Bros. Discovery, the parent company of HBO and DC Studios, can’t simply brush it aside.
Paramount has made unsolicited takeover offers before and been turned down, but this new pitch has clearly gotten the attention of investors.
Shareholders have reportedly been vocal about wanting the board to weigh every option, even with a deal already inked with Netflix.
As it stands, Netflix’s revised all-cash offer would see the streaming giant acquire Warner Bros.’ film and television assets for $27.75 per share. That number was bumped up from an earlier mix of cash and stock. Paramount, on the other hand, was offering $30 per share in cash.
Warner says that the Ellison camp have now verbally agreed to boost its bid to $31 or higher if two the sides engaged, which WBD today has agreed to do.
“On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY’s best and final proposal,” WBD’s board said in a letter to Paramount it released today.
“We are writing to inform you that Netflix has agreed to provide WBD a waiver of certain terms of the Netflix merger agreement to permit us, through February 23, to engage with PSKY to clarify your proposal, which we understand will include a WBD per share price higher than $31. We seek your best and final proposal.
“To be clear, our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. We continue to recommend and remain fully committed to our transaction with Netflix and have scheduled a special meeting of our shareholders on March 20, 2026 to vote on the Netflix merger agreement.”
According to the report, "Its latest bid added a new $0.25-per-share so-called 'ticking fee' payable to WBD shareholders for each quarter its transaction has not closed beyond December 31, 2026, which it said comes to about $650 million in cash value each quarter."
That ticking fee adds real pressure and real money to the equation. The report continues: "It also agreed to fund a $2.8 billion termination fee that would be payable to Netflix and ticked off a series of concessions around WBD's debt financing costs and obligations. Paramount still has not defined that bid as its last and best offer."
That’s a serious escalation. Covering a $2.8 billion breakup fee and offering additional financial concessions makes it clear Paramount wants this deal badly.
Of course, this could also be strategic maneuvering on Warner Bros. Discovery’s part. Opening talks with Paramount might be a way to nudge Netflix into sweetening its current offer. Corporate negotiations at this level are rarely straightforward, and both sides know what’s at stake.
Adding another layer to the situation, Variety reports that the WBD board may be pushing Paramount to put forward its absolute best and final proposal. That would allow shareholders "to make a considered choice, and it would allow WBD to push Netflix to match Paramount Skydance terms if they are deemed better than the existing agreement."
In other words, Warner Bros. Discovery could be setting up a bidding war.
There’s also a key structural difference between the two offers. Netflix is reportedly interested only in Warner Bros. Pictures and HBO/HBO Max. Paramount’s ambition goes much further, aiming to acquire the entire company, including cable brands like CNN, TNT, Discovery, HGTV, and Food Network.
For now, Netflix is widely viewed as the less disruptive option in what could become one of the biggest corporate shakeups in Hollywood history. But with Paramount increasing the cash on the table and adding financial incentives that are hard to ignore, it’ll be interesting to see how this all plays out.
Press releases might suggest certainty, but in Hollywood business, nothing’s final until the ink dries and the checks clear. Stay tuned. This one isn’t over yet.