Warner Bros. officially deems Paramount’s bid ‘superior’ to Netflix’s
Warner Bros. Discovery has formally declared Paramount Skydance’s latest takeover proposal a “superior” offer to its existing deal with Netflix, escalating one of the most dramatic bidding wars Hollywood has seen in years. The determination sets a four-business-day clock for Netflix to decide whether it is willing to raise its own bid to keep control of a deal it struck just three months ago.
In a statement Thursday, Warner Bros. Discovery said its board concluded that Paramount’s revised all‑cash offer to buy the entire company qualifies as a “Company Superior Proposal” under the terms of its merger agreement with Netflix. The bid values Warner Bros. Discovery at around $111 billion, or $31 a share, up from Paramount’s earlier $30‑per-share proposal and well above the economics of Netflix’s $83‑billion pact announced in December.
Warner Bros. Discovery notified Netflix that Paramount’s offer is now deemed superior, formally triggering a contractual window during which Netflix can submit changes to its deal in an attempt to reclaim that status. The board stressed that until that window closes and a final determination is made, the Netflix agreement technically remains in force and continues to carry the board’s recommendation to shareholders.
Richer price, heavier protections
Paramount’s bid stands out not just on headline price but on the protections it has offered to reassure Warner Bros. Discovery and its investors. The package includes a $7 billion reverse termination fee if regulators block the transaction, a commitment to pay Warner Bros. Discovery’s multibillion‑dollar breakup fee owed to Netflix if that agreement is terminated, and a “ticking fee” of 25 cents per share per quarter if closing drags beyond the fall.
Paramount has also stripped away earlier conditions tied to the performance of Warner Bros. Discovery’s cable portfolio and pledged to inject additional equity if needed to satisfy lenders, moves intended to reduce execution risk. Backed by David Ellison and a financing package combining roughly $45 billion–$46 billion in equity with more than $57 billion of debt, the bid represents an aggressive push to seize one of Hollywood’s crown jewel studios outright.
Netflix on the clock
Netflix, which had originally outbid Paramount in December to secure a deal for Warner Bros. Discovery’s studio, HBO, and streaming assets, now faces a stark choice: walk away or pay up. Under the merger agreement, it has four business days to propose amendments—likely a higher price and stronger reverse breakup protections—if it wants Warner Bros. Discovery’s board to reconsider and strip Paramount of its “superior” label.
Any move by Netflix will be scrutinized by its own investors, who have already expressed concern about the size, strategic fit, and regulatory overhang of the Warner Bros. Discovery transaction. Seen by the market as a “deal stock,” as S&P Global’s Melissa Otto previously told Fortune, Netflix stock has actually been trading up since Paramount raised its bid, as investors cheer the prospect of Netflix losing the deal and not saddling itself with legacy Hollywood assets.
Netflix executives have argued that combining the companies would lower consumer prices by enabling more efficient streaming bundles and support job creation, a message they have taken to skeptical lawmakers in Washington.
Regulatory risk looms large over both scenarios, but the shape of that risk differs for each suitor. A Netflix–Warner Bros. Discovery combination would fuse a dominant global streamer with one of the industry’s deepest content libraries, inviting intense antitrust scrutiny over market power in subscription video. Paramount’s offer, by contrast, is structured as a more traditional studio‑and‑networks consolidation, but it would still create a media giant that rivals Disney and Comcast’s NBCUniversal in scale.
The battle has also attracted political attention, with President Donald Trump at first saying he would be involved while praising Netflix Co-CEO Ted Sarandos as a “fantastic man,” then saying he wouldn’t be involved, and recently angry about stray comments made by former Obama official and Netflix board member Susan Rice. The Ellison family, meanwhile, is reportedly close to Trump at the moment, although he insisted in December that he would hate to see his enemies if the Ellisons are to be considered his friends.
Both bidders are effectively paying for the right to navigate that fraught landscape, with Paramount’s multibillion‑dollar reverse breakup fee framed as a demonstration of confidence that regulators will ultimately sign off. The ball is back in Netflix’s court for now.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
