Warner Bros. Discovery Board Signals Shift as Paramount Skydance Bid Gains Traction

Despite the board’s determination that the PSKY bid could be superior, the Netflix Merger Agreement remains in effect.

RMN News Entertainment Desk
New Delhi | February 25, 2026

NEW YORK — In a major turning point for the future of media consolidation, the Board of Directors for Warner Bros. Discovery (WBD) has determined that a revised, unsolicited proposal from Paramount Skydance (PSKY) could reasonably be expected to lead to a “Company Superior Proposal”. This development challenges the company’s existing merger agreement with Netflix, which has been the board’s primary focus for transforming the entertainment giant.

A Quantifiable Value Gap

The shift in momentum follows a period of intense skepticism from WBD leadership regarding the execution risks of the Paramount Skydance bid. Initially, the board favored Netflix due to its “investment-grade credit rating” and “financing certainty,” despite PSKY’s higher headline valuation.

However, the new revised offer from PSKY presents a robust financial package designed to address the board’s previous concerns:

• Increased Price: An all-cash offer of $31.00 per share.
• Breakup Fee Coverage: PSKY has committed to paying the $2.8 billion termination fee that WBD would owe Netflix if it exits their current agreement.
• Regulatory Safeguards: A massive $7 billion regulatory termination fee payable to WBD if the deal fails to close due to government intervention.
• Ticking Fees: A daily fee of $0.25 per share, per quarter, starting after September 30, 2026, to protect shareholders against closing delays.

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The Strategic Battle for Assets

At the heart of this corporate standoff is WBD’s strategic goal to bifurcate its high-growth Streaming and Studio assets from its legacy Global Linear Networks, which are facing a secular decline in the digital age.

While the Netflix merger was initially positioned as the “only path with a credible closing profile,” PSKY has aggressively countered with its “Stronger Hollywood” campaign and proxy solicitations to influence shareholder sentiment. The board has noted that the new PSKY proposal specifically excludes the performance of the declining Linear Networks business from its “Material Adverse Effect” definition, further aligning with WBD’s long-term restructuring goals.

Netflix Maintains Matching Rights

Despite the board’s determination that the PSKY bid could be superior, the Netflix Merger Agreement remains in effect. The WBD Board has not yet officially withdrawn its recommendation for the Netflix deal, and a special shareholder meeting for that transaction is still scheduled for March 20, 2026.

Under the terms of the existing agreement, if the WBD Board ultimately decides the PSKY offer is officially a “Superior Proposal,” Netflix will have four business days to negotiate revisions and match or exceed the competing bid.

What’s Next?

The expiration of a narrow seven-day waiver on February 23 allowed WBD to clarify “deficiencies” in PSKY’s initial proposal, leading to this current breakthrough. WBD leadership, including CEO David Zaslav and Board Chair Samuel A. Di Piazza, Jr., will now engage in further discussions with PSKY to see if a definitive, superior agreement can be reached.

Investors are cautioned that there is currently no assurance that these discussions will result in a final transaction with Paramount Skydance.