The seemingly never-ending takeover saga involving global media and entertainment heavyweights Warner Bros. Discovery (WBD), Paramount Skydance, and Netflix, has experienced another twist.
Netflix and Paramount have both been vying to buy out WBD for several months, with Netflix striking what was considered a binding agreement (worth $72 billion) in early December.
However, WBD and Paramount have now re-opened talks (with Netflix forced to grant a special waiver for this to take place), with WBD now giving Paramount - from yesterday - seven days for its best and final takeover offer to be submitted.
WBD confirmed earlier this week that Paramount - which submitted a hostile takeover bid worth $108 billion later in December - now has until February 23 to present its best offer.
The Netflix-WBD deal, if it goes through (shareholders have until March 20 to vote on the proposal), will see the specific film and TV divisions of WBD come under Netflix ownership as soon as the Discovery Global arm, which contains the TNT sports channels in the Americas, is separated.
Paramount’s offer, meanwhile, will see the firm take over WBD’s business across both units. To sweeten its offer, it has also recently said it will cover a fee of $2.8 billion owed to Netflix if it pulls out of the deal.
Billionaire Larry Ellison, father of Paramount's CEO David, has also said he will personally guarantee $40 billion of the buyout fee.
In a letter to Paramount's board, Samuel DiPiazza Jr (WBD's chair) and David Zaslav (its chief executive) said: “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. [However], we welcome the opportunity to engage with you and expeditiously determine whether Paramount Skydance can deliver an actionable, binding proposal that provides superior value.”
WBD is allowed to engage with rival bidders despite the binding Netflix agreement if the board believes such engagement could lead to a "reasonably superior offer," through a loophole in the contract signed by the two behemoths.
In its own statement, Netflix has said: "While we are confident that our transaction provides superior value and certainty, we recognise the ongoing distraction for WBD stockholders and the broader entertainment industry caused by Paramount Skydance’s antics."
Paramount’s CBS Sports network holds rights to several major properties, including European club soccer’s UEFA Champions League, American football’s NFL, PGA Tour golf, and top-tier college sports. In 2024, it aired the most-watched NFL Super Bowl in history.
In terms of its major rights, WBD in the US has a domestic rights stable that includes the French Open tennis grand slam, Major League Baseball, college football, and ice hockey’s NHL, as well as an expansive international portfolio that also includes the HBO Max streaming service.
Netflix, meanwhile, has been getting more involved in the livestreaming of sports over recent years, and now holds rights to top-tier properties from sports such as American football, baseball, boxing, tennis, and soccer (through the acquisition of FIFA Women's World Cup rights in the US for the next two editions).
If Paramount makes a superior offer over the coming days, Netflix will have the right to improve its own submission.
