The board of Warner Bros Discovery (WBD) has taken a firm stance, publicly urging its shareholders to reject a revised and hostile $108.4 billion takeover bid from Paramount Skydance. The directors have reaffirmed their unanimous support for a competing, lower-value offer from streaming giant Netflix.
Board Cites "Extraordinary" Debt Risk in Paramount Offer
In a direct letter to investors dated Wednesday 7 January 2026, the WBD board laid out its concerns. It stated that the updated all-cash proposal from Paramount Skydance (PSKY) for the entire business relies on an "extraordinary amount of debt financing." This structure, the board argues, presents a significant risk that the deal might not be completed successfully.
The Paramount bid is hostile, having been made directly to WBD's shareholders after the board had already endorsed Netflix's $72 billion cash-and-stock offer in early December. The Netflix deal values each Warner share at approximately $27.75, while Paramount's offer is pitched at a higher $30 per share.
Netflix Deal Presents Clearer Path, Says Board
The WBD letter dismissed Paramount's claims that its offer was "superior." It reiterated strong backing for the Netflix agreement, which would see Netflix acquire WBD's prized TV and film studios, vast back catalogues including Harry Potter and Game of Thrones, and the HBO Max streaming service.
Financial analysts have noted that while Netflix's bid has a lower headline value, it comes with a clearer financing structure and fewer execution risks. In contrast, the WBD board warned that the Paramount financing plan would burden the combined entity with a staggering $87 billion in debt.
The board also found inadequate a last-minute commitment made by Paramount just before Christmas, which involved $40 billion in equity personally guaranteed by Larry Ellison, the billionaire father of Paramount's CEO David Ellison.
Regulatory Hurdles and Shareholder Choice
The battle highlights the complex landscape of media consolidation. Paramount had argued its offer provided a "more certain and quicker path to completion," questioning the regulatory scrutiny Netflix might face due to its streaming market dominance.
However, the WBD board concluded that the revised Paramount offer still posed unacceptable risks, citing "the insufficient value it would provide, the lack of certainty in PSKY's ability to complete the offer, and the risks and costs borne by WBD shareholders." Shareholders now face a critical decision between a higher-priced but highly leveraged bid and a lower-valued offer with board approval and perceived stability.
