Inside the Battle for Warner Bros. Discovery: A High-Stakes Corporate Showdown
The corridors of Hollywood are abuzz with the intense, high-stakes maneuvering for control of Warner Bros. Discovery (WBD), a media titan boasting an unparalleled portfolio of iconic brands from HBO and Warner Bros. Pictures to CNN and the Food Network. At the heart of this unfolding drama is a pivotal question posed by WBD to David Ellison’s Paramount Skydance: Is your final offer for our company truly above $31 per share? This query signals a dramatic turning point in a corporate saga that could redefine the entertainment landscape.
The intricate dance of mergers and acquisitions surrounding Warner Bros. Discovery has entered its critical final stages. On a recent Tuesday, WBD publicly confirmed that its board of directors, after initially resisting multiple overtures, would engage in direct discussions with the Ellison-led Paramount Skydance. The purpose? To “seek clarity” and extract Paramount’s “best and final offer” in what has become a protracted and increasingly aggressive hostile takeover attempt. This move, while opening a door to negotiations, underscores the immense pressure and strategic complexity facing WBD’s leadership as they navigate competing visions for the company’s future.
Adding another layer of urgency to the proceedings, Warner Bros. Discovery concurrently announced March 20, 2026, as the crucial date for a special meeting of its shareholders. It is on this day that WBD’s investors will cast their votes on the proposed $83 billion deal with streaming giant Netflix, which seeks to acquire WBD’s highly coveted studios and premium content platform, HBO Max. This pre-existing agreement, a cornerstone of WBD’s strategic future, remains the board’s preferred path. Even as it reluctantly opens a seven-day window for dialogue with Paramount Skydance, WBD’s board of directors issued a firm reaffirmation: they “continue to unanimously recommend in favor of the Netflix merger.” Furthermore, in a clear signal of their current assessment, the board also unanimously recommended that shareholders reject Paramount Skydance’s most recent offer, setting a defiant tone for the upcoming negotiations.
The ability for WBD to even engage in these discussions with Paramount Skydance stems from a limited waiver granted by Netflix. Under the terms of their existing merger agreement, Netflix provided WBD a temporary reprieve, allowing a seven-day negotiation period that concludes on February 23, 2026. During this tightly constrained window, WBD articulated its intention to “engage with [Paramount Skydance] to discuss the deficiencies that remain unresolved and clarify certain terms of PSKY’s proposed merger agreement.” This implies that while the door is ajar, WBD is approaching these talks with specific concerns and a clear agenda, not merely as a receptive listener.
Paramount Skydance’s pursuit of WBD has been characterized by its escalating intensity. On February 10, Skydance significantly upgraded its initial hostile $30-per-share offer for the entirety of WBD. This enhanced bid introduced several compelling sweeteners designed to sway shareholders. Notably, Paramount committed to paying WBD 25 cents per share—a substantial sum equating to roughly $650 million in cash each quarter—should its proposed acquisition of WBD fail to close beyond December 31, 2026. This penalty clause is a powerful incentive, offering a degree of financial certainty to shareholders concerned about potential regulatory delays or other unforeseen hurdles. Additionally, Paramount pledged to cover the formidable $2.8 billion termination fee that would be owed to Netflix if WBD shareholders ultimately chose to accept Paramount’s offer over the Netflix deal, effectively removing a significant financial barrier for WBD.
The plot thickened further when, following Paramount’s submission of this latest amended offer, a “senior representative for PSKY” conveyed orally to a WBD board member a crucial piece of information: if the WBD board authorized M&A talks, Paramount “would agree to pay $31 per share and that the offer was not PSKY’s ‘best and final’ proposal.” While WBD chose not to disclose the identities of the Paramount representative or the Warner Bros. Discovery director involved in this conversation, the implication was clear: Paramount Skydance was prepared to go higher, and its written offers did not yet reflect its maximum willingness to pay. This verbal assurance became a critical point of contention for WBD.
WBD quickly highlighted that this $31-per-share price, along with “several other matters” Paramount claimed it would address in its February 10 letter, were conspicuously “not reflected in the latest merger agreement that PSKY proposed.” This discrepancy between verbal promises and documented terms presented a significant challenge to WBD’s board, which prioritizes legally binding commitments. To bridge this gap and establish “specific clarity in this regard,” WBD took decisive action. On Tuesday, it dispatched a formal letter to the Paramount Skydance board, meticulously outlining the key issues that remained unaddressed. Accompanying this letter were drafts of full transaction agreements, serving as WBD’s proposed framework for Paramount to confirm the precise terms of its offer. This move underscored WBD’s demand for concrete, legally enforceable proposals rather than vague assurances.
The letter, co-signed by Warner Bros. Discovery CEO David Zaslav and board chairman Samuel Di Piazza Jr., left no room for ambiguity regarding WBD’s expectations. “WBD wants Paramount Skydance ‘to clarify your proposal, which we understand will include a WBD per share price higher than $31,'” they wrote. The message was unequivocal: “We seek your best and final proposal. 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.” This statement served as both an invitation to a higher bid and a firm reiteration of the board’s current preference for the Netflix deal, emphasizing that Paramount still had considerable ground to cover to win their favor.
Despite opening the door to negotiations, Warner Bros. Discovery maintained a cautious stance. The company stressed that “there can be no assurance that a definitive transaction will result from WBD’s discussions with Paramount Skydance.” This disclaimer serves to manage shareholder expectations and reinforce the board’s primary commitment. The WBD Board and management team, the company affirmed, “remain resolute in their commitment to maximizing value for shareholders and continue to recommend shareholders vote FOR the merger with Netflix.” This unwavering support for the Netflix deal, even in the face of a potentially higher bid from Paramount, speaks volumes about the perceived certainty and strategic alignment of the Netflix proposition.
A crucial element in this high-stakes game is Netflix’s strategic position. The streamer retains its matching rights, as explicitly specified by the merger agreement. This means that even if Paramount Skydance were to present an offer deemed superior by WBD’s board, Netflix would have the opportunity to counter with an even higher bid for the coveted Warner Bros. assets. This contractual right provides Netflix with a powerful defensive mechanism, ensuring they remain a formidable contender until the very end and highlighting the depth of their commitment to acquiring WBD’s content engine.
David Zaslav, WBD’s President and Chief Executive Officer, articulated the company’s guiding principles in a public statement: “Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders. Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer.” His words underscore a methodical, shareholder-first approach, emphasizing transparency and a clear path to resolution.
Samuel Di Piazza Jr., WBD’s Board Chairman, echoed Zaslav’s sentiments, further elaborating on the board’s rationale for favoring the Netflix merger. “As announced today, we continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction’s protections for shareholders against downside risk. With Netflix, we will create a brighter future for the entertainment industry – providing consumers with more choice, creating and protecting jobs and expanding U.S. production capacity while increasing investments to drive the long-term growth of our industry.” This statement highlights not only the financial benefits but also the strategic vision and broader industry impact that the board associates with the Netflix partnership.
The journey to this intense bidding war began in early December, when Netflix initially announced a $27.75-per-share cash-and-stock agreement to acquire Warner Bros.’s esteemed film and TV studios, the premium HBO and HBO Max platforms, and WBD’s burgeoning games division. This move by Netflix was a clear signal of its ambition to bolster its content pipeline with some of the most respected and valuable intellectual property in entertainment, from the DC Comics universe to the acclaimed HBO originals. Amid the escalating pressure from Paramount Skydance’s hostile takeover campaign, Netflix strategically pivoted last month, converting its original offer to an all-cash proposition. This shift significantly de-risked the deal for WBD shareholders, removing any uncertainty tied to Netflix’s stock performance and making the offer more attractive. Warner Bros. Discovery has also outlined its internal restructuring plans, expecting to spin off Discovery Global—a significant entity comprising CNN, TNT, TBS, Food Network, HGTV, and other popular cable networks, along with assets like Discovery+—in the third quarter of 2026, prior to the Netflix deal’s anticipated close. This strategic separation aims to streamline WBD’s operations and create focused entities post-acquisition.
Paramount Skydance’s formidable financial backing underpins its aggressive pursuit. Its February 10 amended offer, which carries an enterprise value of approximately $108 billion, is described as “fully financed.” This robust financial foundation includes $43.6 billion in equity commitments from Larry Ellison, the legendary mega-billionaire tech mogul and David Ellison’s father, alongside investment firm RedBird Capital Partners. Complementing this equity is a staggering $54 billion of committed debt financing secured from major financial institutions including Bank of America, Citigroup, and Apollo Global Management. The bid’s global reach is further solidified by the involvement of sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi, showcasing the immense international interest in WBD’s assets and the scale of Paramount’s ambition.
As the clock ticks down, WBD shareholders are preparing for their critical decision. The special shareholders meeting to vote on the Netflix pact is scheduled to commence at 8 a.m. Eastern on March 20, 2026. Only WBD shareholders of record as of 5 p.m. Eastern on February 4, 2026, will be eligible to cast their votes at this pivotal meeting, which will ultimately determine the company’s future trajectory. More information for shareholders is available at VoteWBDNetflix.com.
The following is the verbatim text of the letter Warner Bros. Discovery sent to Paramount Skydance’s board, illuminating the strategic complexities and firm demands from WBD’s leadership:
Dear Members of the PSKY Board:
The Board of Directors of Warner Bros. Discovery (WBD) is fully committed to delivering a superior transaction to our shareholders. Since our decision last year to separate our Streaming & Studios businesses from our Global Linear Networks business, we have actively explored a wide range of alternatives, including through a publicly-announced strategic review process in which Paramount Skydance (PSKY) participated, having initially approached WBD in September 2025. Our agreed transaction with Netflix offers superior value for our shareholders, allows us to achieve our strategic goal to separate WBD’s businesses, offers a high degree of certainty with minimal risk to the businesses in the interim and has essentially no financing risk. The WBD Board continues to unanimously recommend that our shareholders approve the Netflix transaction, as reflected in the definitive proxy statement we have filed with the SEC today.
On February 10, PSKY amended its tender offer for WBD common stock. While this amendment addresses some of the concerns that WBD had identified several months ago, it still contains many of the unfavorable terms and conditions that were in the draft agreements submitted by PSKY on December 4, 2025 and December 22, 2025 and twice unanimously rejected by our Board. PSKY indicated in its February 10 letter to the WBD Board a willingness to address some of those concerns, but does not do so in its proposed merger agreement, leaving WBD with vague assurances of intention. Other important issues raised several times with PSKY are unchanged from your prior submissions. On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY’s ‘best and final’ proposal.
We are writing to inform you that Netflix has agreed to provide WBD a waiver of certain terms of the Netflix merger agreement to permit us, through February 23, to engage with PSKY to clarify your proposal, which we understand will include a WBD per share price higher than $31. We seek your best and final proposal. 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 and have scheduled a special meeting of our shareholders on March 20, 2026 to vote on the Netflix merger agreement.
As you know, it is typical and expected for a would-be overbidder to accept the substantive terms of the merger agreement that the target company has already agreed with its existing merger party. To provide you with specific clarity in this regard, we have prepared, and our legal counsel will deliver to you today, copies of transaction agreements that conform to this approach, address key issues for the WBD Board in prior PSKY offers and incorporate the terms and assurances reflected in your February 10 letter, as well as certain other changes to reflect matters unique to your proposal. Attached at the end of this letter is a business summary of these changes. As part of your binding proposal, the WBD Board needs confirmation that you are prepared to sign our proposed agreements. We encourage you to be direct and transparent with your best and final value and other terms in that binding proposal.
During this seven-day period – as we consistently did during the strategic review process last year – we welcome the opportunity to engage with you and expeditiously determine whether PSKY can deliver an actionable, binding proposal that provides superior value, transaction certainty and interim protection for WBD’s businesses to Warner Bros. Discovery shareholders.
On behalf of the WBD Board of Directors,
Samuel A. DiPiazza, Jr.
Board Chair
David Zaslav
President and Chief Executive Officer
Summary of Changes to Transaction Agreements
Below is a summary of the principal business changes reflected in the transaction agreements provided by WBD today, as compared to the draft agreements provided by PSKY in its tender offer. Many of these reflect terms proposed by PSKY in its public statements but not reflected in its merger agreement; others align the draft agreement with the terms of the Netflix merger agreement.
