Paramount Skydance Raises Warner Bros. Discovery Bid to $31 Per Share as Netflix Circles Studios

Paramount Skydance lifted its acquisition offer for Warner Bros. Discovery to $31 per share from $30, the media company disclosed Tuesday, as a competing bid from Netflix for WBD's film and streaming assets pressures the deal structure.

Warner Bros. Discovery said in a regulatory filing that the revised Paramount proposal "could reasonably be expected to lead to a 'Company Superior Proposal,'" the formal language indicating the board may favour the higher bid over existing arrangements.

Expanded Deal Protections

Under the amended terms, David Ellison's Paramount Skydance would assume the $7 billion regulatory termination fee if antitrust authorities block the merger. The original proposal left Warner Bros. Discovery exposed to that liability.

Paramount also agreed to pay Warner Bros. Discovery shareholders $0.25 per share for each day the transaction remains unclosed starting September 30, pulling forward the penalty start date from the previous December 31 threshold. At Warner Bros. Discovery's 1.47 billion shares outstanding, the daily fee would total roughly $368 million per day.

Netflix Bid Complicates Timeline

The bid increase follows Netflix's approach to acquire Warner Bros. Discovery's studio operations and Max streaming platform, according to the filing. Warner Bros. Discovery did not disclose financial terms of the Netflix proposal.

Warner Bros. Discovery shares closed at $10.84 Tuesday, up 2.1% on the session but well below the $31 offer price. The gap reflects investor scepticism about deal completion amid regulatory scrutiny of media consolidation.

The combined Paramount-Warner Bros. Discovery entity would control major film franchises including DC Comics properties, Harry Potter, and Mission: Impossible, alongside cable networks CNN, MTV, and Nickelodeon. The merged company would also operate the Paramount+ and Max streaming services, which together reported 180 million subscribers in their most recent quarterly disclosures.

Antitrust Hurdles Loom

Federal regulators have challenged recent media mergers on competition grounds. The Department of Justice sued to block Penguin Random House's acquisition of Simon & Schuster in 2021, and the Federal Trade Commission opposed Microsoft's $69 billion Activision Blizzard purchase before ultimately allowing it to proceed with concessions.

A Paramount-Warner Bros. Discovery combination would consolidate theatrical distribution, reducing the number of major studios from five to four. The companies would also control substantial cable television infrastructure at a time when regulators have expressed concern about content owners leveraging distribution power.

Warner Bros. Discovery carries $43.2 billion in debt following its 2022 merger of WarnerMedia and Discovery. The company reported $10.7 billion in revenue for the third quarter of 2024, down 4% year-over-year, with streaming losses narrowing to $99 million from $387 million in the prior-year period.

Paramount Global posted $7.4 billion in third-quarter revenue, declining 6% annually, while its Paramount+ streaming unit reduced losses to $238 million from $286 million a year earlier.

What Happens Next

Warner Bros. Discovery's board must now evaluate whether the revised Paramount offer or the Netflix bid constitutes a superior proposal under the company's existing merger agreement with Paramount. The board has not set a timeline for its decision.

The companies have not disclosed an expected closing date for either transaction, though the September 30 start date for daily termination payments suggests Paramount anticipates regulatory review extending into the fourth quarter at minimum.