Warner Bros. Discovery’s board has determined that Paramount’s latest $31 per share offer is a “superior proposal” to Netflix’s $83 billion deal.
Paramount CEO David Ellison’s tenth bid includes a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters.
It will also cover a $2.8 billion termination fee that WBD would be required to pay to Netflix and agreed to eliminate $1.5 billion in potential financing costs associated with WBD’s debt exchange offer and and exclude the performance of WBD’s Global Linear Networks business from the deal’s “material adverse affect” definition.
The Ellison family trust will provide $45.7 billion in equity financing, which Oracle co-founder Larry Ellison has agreed to backstop with a personal guarantee, including an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks. Bank of America Merrill Lynch, Citi and Apollo are providing a $57.5 billion debt commitment.
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” Ellison said in a statement.
Netflix will now have four business days to match Paramount’s offer and negotiate with WBD to propose any revisions to its current deal. The streamer is currently offering $27.75 per share for WBD’s studio and streaming assets, plus additional “stub equity” from the pending spinoff of Warner’s cable networks into Discovery Global.
If the board determines, after considering the revisions and consulting with its financial and legal advisors, that Paramount’s bid continues to constitute a superior proposal, the board would be entitled to terminate the Netflix deal.
For now, the Netflix deal remains in effect and the board is not withdrawing or modifying its recommendation. Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET.
Representatives for Netflix did not immediately return TheWrap’s request for comment.
The switch towards Paramount comes as Netflix has faced increased regulatory and political pressure in recent days.
President Donald Trump has called on the streamer to fire board member and former UN ambassador Susan Rice or “pay the consequences.” The call came over the weekend after Rice said that corporations who “bent the knee” to the administration would face consequences of their own when Democrats return to power.
In a Truth Social post, Trump called Rice “racist” and “deranged” and said she has “no talent or skills.” He also questioned how much she is being paid by Netflix and said that her “power is gone and will never be back.”
In an interview with the BBC on Monday, Sarandos brushed off the president’s comment about Rice, saying Trump “likes to do a lot of things on social media.”
The Department of Justice has also issued a civil investigative demand (CID) to theater owners, filmmakers and producers to get their input as part of its antitrust review of the Netflix deal as it evaluates whether a combination with Warner Bros. would hurt consumers, the theatrical business, competition and jobs in Hollywood.
On Thursday, Sarandos headed to Washington to meet with Attorney General Pam Bondi, DOJ antitrust officials and White House chief of staff Susie Wiles about the Warner Bros. deal. It is unclear if Sarandos’ meeting at the White House also includes Trump.
In addition, a group of 11 Republican state attorneys general have warned a deal with Warner Bros. would give Netflix “undue market concentration that stifles competition” and create “higher prices, lower reliability, and less innovation for one of America’s major industries—all to the detriment of American consumers.” California Attorney General Rob Bonta has also called for a “full and robust” review of both the Netflix deal and Paramount’s rival bid for all of WBD.
The Senate Judiciary’s subcommittee on antitrust, competition and consumer rights has also set a new hearing for March 4, examining the potential competition and monopsony concerns from a Netflix-Warner Bros. combination. Witnesses for the hearing have not yet been announced.
The latest hearing comes after Sarandos and Warner Bros. Discovery chief strategy officer Bruce Campbell testified before the committee earlier this month. Following that hearing, Sen. Mike Lee, who serves as the committee’s ranking Republican, sent follow-up questions to the pair asking for more specifics on the companies’ plans, including around content spending, licensing and production as well as how YouTube exerts pressure on the companies.
Netflix has said it expects a deal to close within 12 to 18 months, pending regulatory approval, while Paramount has argued a potential deal with Warner Bros. would close within a year.
