LOS ANGELES, Dec 17 – Warner Bros Discovery has firmly rejected a massive hostile takeover proposal from Paramount Skydance, setting the stage for one of the most intense corporate battles the global entertainment industry has seen in years. The Warner Bros Discovery board concluded that Paramount’s $108.4 billion bid failed to provide credible financial assurances and exposed shareholders to unacceptable levels of risk. Instead, the company continues to support a binding merger agreement already reached with Netflix, which it views as significantly more secure and strategically sound.
The clash involves some of the most powerful names in media and technology and centers on control of Warner Bros Discovery’s prized assets, including its historic film and television studios, the HBO Max streaming platform, and globally recognized franchises such as Harry Potter. While Paramount insists its all cash proposal offers superior value, Warner Bros leadership has repeatedly emphasized that certainty, credit strength, and deal structure matter more than headline price figures.
Board Dismisses Paramount Offer as Risky and Unreliable
In a detailed message to shareholders, the Warner Bros Discovery board stated that Paramount’s proposal lacked the firm and unconditional financing commitments required for a transaction of this scale. The board said it had been assured multiple times that Paramount’s $30 per share cash offer was fully guaranteed by the Ellison family. After further review, Warner Bros concluded that such guarantees were either incomplete or nonexistent.
According to the board, the Paramount proposal relies heavily on a revocable trust linked to the Ellison family rather than a direct, unconditional backstop from controlling shareholders. Warner Bros argued that a revocable trust, by its nature, offers far less security since its assets can be altered or withdrawn at any time. This uncertainty, the board said, creates a scenario where shareholders could be exposed to significant downside risk if financing were to unravel before the transaction closes.
By contrast, the Netflix agreement is described as fully binding, with no need for additional equity financing and with firm debt commitments already in place. The Warner Bros board emphasized that Netflix’s offer, valued at $27.75 per share in a mix of cash and stock, provides clarity and enforceability that Paramount’s proposal simply does not match. While Paramount has argued that an all cash deal shields shareholders from market volatility, Warner Bros countered that a higher risk cash offer is not automatically superior to a slightly lower but far more dependable bid.
Warner Bros also highlighted concerns about Paramount’s overall financial health. Paramount’s market value is significantly smaller, and its credit rating sits just above speculative grade. A combined company, according to Warner Bros, would carry a heavy debt burden, with leverage approaching seven times operating income and limited free cash flow. The board warned that such a structure could restrict future investment in content, innovation, and long term growth.
The proposed merger would also impose strict operating restrictions on Warner Bros Discovery during the period between signing and closing. These limitations could hinder content licensing, strategic partnerships, and day to day decision making at a time when agility is critical in the rapidly evolving media landscape.
Netflix Deal Gains Favor as Battle Intensifies
While Paramount has publicly criticized Warner Bros Discovery for what it calls a lack of transparency, the board rejected those claims, stating that it engaged extensively with Paramount representatives. The board detailed numerous discussions, meetings, and direct conversations with Paramount leadership, including multiple in person sessions. After each proposal, Warner Bros said it clearly communicated the deficiencies it identified and suggested ways the bid could be improved. Despite this feedback, the board maintains that Paramount never presented a proposal that surpassed the Netflix agreement in overall value and certainty.
Netflix, meanwhile, has taken steps to ease concerns among regulators and industry stakeholders. The streaming giant has indicated it would continue releasing Warner Bros films in cinemas, addressing fears that the deal could reduce theatrical output or further concentrate power within the streaming sector. Netflix executives have also expressed confidence that regulatory authorities in the United States and Europe will ultimately view the transaction favorably.
Paramount has defended its offer aggressively, arguing that it delivers greater certainty through cash consideration and avoids leaving shareholders tied to a company burdened by legacy linear television operations. Paramount leadership has pointed to planned cost savings and operational synergies estimated at $9 billion, which it says would strengthen the combined business. Warner Bros, however, described these synergy targets as overly ambitious and warned that achieving them would likely involve widespread job cuts and further strain on an industry already facing economic pressure.
Another blow to Paramount’s bid came with the departure of a key financial backer. Affinity Partners, an investment firm previously associated with the proposal, confirmed it is no longer participating, citing significant changes in the structure and dynamics of the investment. Warner Bros viewed this development as further evidence of instability surrounding Paramount’s financing plan.
Market reaction reflected investor uncertainty. Warner Bros Discovery shares edged lower following news of the board’s rejection, while Netflix stock gained, signaling confidence in the streaming company’s strategic position. Paramount shares fell more sharply, underscoring concerns about the viability of its bid.
As the standoff continues, Warner Bros Discovery has not yet scheduled a shareholder vote on the Netflix deal, though leadership expects it to take place in the coming months. For now, the board remains resolute, arguing that its responsibility is not simply to chase the highest number on paper, but to choose the path that offers shareholders the strongest combination of value, certainty, and long term stability.