Paramount Takes Lead Over Netflix in Warner Bros. Discovery Bid

In the ongoing battle between Paramount and Netflix to own Warner Bros., there’s been a shift in power, as the Warner Bros. Discovery board has announced that Paramount Skydance’s newest offer for the studio is a “superior proposal” to the current one from Netflix. WBD has now given Netflix the deadline of four business to submit a counteroffer, per the terms of the Netflix merger agreement that was previously signed by the two companies in December.

That original merger agreement was followed by Paramount launching a hostile takeover attempt to acquire Warner Bros. Should the WBD board find that Netflix’s counteroffer is not an improvement on the Paramount deal, “WBD would be entitled to terminate the Netflix merger agreement” (per an official WBD statement).

The offers from Netflix and Paramount differ in dramatic ways, and the WBD statement specified the elements that made the Paramount deal the superior one at this time. This includes a purchase price of $31.00 per WBD share in cash, a $7 billion termination fee to be paid by Paramount should the deal not close due to “regulatory matters,” and Paramount covering the $2.8 billion termination fee WBD would owe Netflix if WBD cancels the Netflix deal. It also mentions “the obligation” of Larry J. Ellison, father of Paramount Skydance CEO David Ellison, to contribute additional equity funding “to the extent needed to support the solvency certificate required by PSKY’s lending banks.”

Ownership over WBD has a political element to it, thanks to the Trump administration’s ability to affect the deal: The president has already issued a very chill demand that executive Susan Rice be removed from the Netflix board, and Netflix’s Ted Sarandos visited Washington D.C. this week to confer with the administration. Meanwhile, Paramount has been actively courting Trump’s approval with moves like greenlighting Brett Ratner’s Rush Hour 4 and putting Bari Weiss in charge of CBS News.

As mentioned, Netflix has four days to respond to the board’s decision regarding the new Paramount offer. Should they manage to proceed forward, there are still a lot of questions to be answered.