Paramount Skydance is beefing up its bid for Warner Bros. Discovery by offering additional cash in every quarter that doesn’t close after this year.
CBS’ parent company also said it would pay a $2.8 billion termination fee if Warner Bros. Discovery breaks its $82.7 billion deal with Netflix for its studio and streaming properties.
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The move is Paramount’s latest effort to loosen its contract with HBO’s parent company, after Warner Bros. has rejected multiple hostile takeover attempts.
Paramount Skydance offered a “ticking fee” of 25 cents per share, which would ultimately amount to $650 million in cash per quarter from early 2027 until closing. But the move does not raise the offer for Warner Bros. as a whole, including its cable assets, by $30 a share, or $108.4 billion including debt.
Both Netflix and Paramount covet Warner Bros.’s major film and television studios, extensive content libraries, and major franchises such as Game of Thrones, Harry Potter, and DC Comics superheroes Batman and Superman.
Ross Venez, senior analyst at eMarketer, told Reuters: “It’s unlikely that this sweet deal will cause WBD to move away from Netflix in favor of Paramount. Paramount is throwing spaghetti at the wall and hoping something works out.” “Besides raising prices, Paramount’s biggest chance to steal WBD is an attack from external regulators to block Netflix.”
Concerns about conflicts of interest loom
Paramount leadership’s relationship with President Donald Trump’s administration has long raised concerns about conflicts of interest. Paramount is led by the Ellison family, and Oracle co-founder Larry Ellison is a key Trump ally.
Paramount plans to raise the personal guarantee from Mr. Ellison to $43.3 billion and finance the deal with $54 billion in debt from Bank of America, Citigroup and Apollo.
CNN’s future will be closely watched as part of this agreement. Netflix has shown little interest in the cable news channel, which the US president has long criticized. However, Paramount expressed a different opinion.
The Wall Street Journal reported late last year that Paramount Skydance CEO David Ellison, the son of Larry Ellison, promised CNN “fundamental reforms” if President Trump ultimately succeeds in acquiring Warner Bros. Discovery.
Following Skydance’s acquisition of the storied station, Paramount has already begun restructuring CBS, including hiring Bari Weiss, a conservative opinion writer with no television experience, to head the nation’s largest news organization.
Press freedom experts say the deal could cause long-term damage to Warner Bros.
“WBD shareholders should oppose any deal that would result in CNN being controlled by people who have already shown a willingness to sell out journalism and journalists for their own other interests,” Seth Stern, advocacy director at the Press Freedom Foundation, told Al Jazeera. “Not to mention WBD’s other holdings, which also rely on strong First Amendment rights. What if Donald Trump objects to the content of HBO’s programming? Authoritarianism is not only bad for democracy, it’s bad for business.”
Democrats, including Sens. Bernie Sanders and Elizabeth Warren, have raised concerns about political bias in the deal with Paramount Skydance, while Republicans say Netflix is politically biased.
Last week, Netflix co-CEO Ted Sarandos appeared before the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, where he was questioned about alleged political bias from Republicans.
“Netflix has no political agenda of any kind,” Sarandos said.
Republicans often treat transgender identity as a political position and label it as an ideology. During the hearing, Missouri Sen. Josh Hawley took to the stage to explain why he would allow content he claimed “promotes transgender ideology.”
“We feature a variety of stories and programs to meet the tastes of different people,” Sarandos said.
If Netflix is successful in its merger battle, it would become the world’s largest streaming platform with about 500 million subscribers.
financial questions
Paramount has proposed other measures to address financial concerns raised by the Warner Bros. board, including a backstop debt exchange in which Paramount would claim the risk of $1.5 billion in fees owed to bondholders.
The company also certified compliance with a second request from the U.S. Department of Justice on Monday, triggering a 10-day waiting period and saying it had already secured permission for foreign investment in Germany. It added that it is in discussions with antitrust regulators in the United States, European Union and United Kingdom.
“While Paramount’s latest offer seeks to address regulatory concerns about closing the deal, both Netflix and Paramount Skydance bids could face lengthy and contentious regulatory scrutiny in the U.S. and internationally, with no guarantee of success,” Seth Shafer, principal analyst at S&P Global, told Reuters.
The company also extended the deadline for Warner Bros. Discovery to consider proposals once again to February 20th. Warner Bros. will hold a special investor meeting to vote on its deal with Netflix, and the streaming pioneer said the meeting is expected to be held by April.
Netflix last month switched to an all-cash offer for Warner Bros. without increasing its $82.7 billion price tag. Warner Bros.’ board said Netflix’s merger deal was better than Paramount’s offer because investors would retain their shares in Discovery Global, which would be traded separately.
On Wall Street, Warner Bros. Discovery shares have risen 2.1% since the market opened on Tuesday. Paramount also rose 1.3% in intraday trading. Netflix also rose about 2.4%.
