Netflix has reworked its proposal for Warner Bros. Discovery into an all-cash bid, a tactical shift aimed at blunting a rival push from Paramount Skydance. The revised structure preserves the previously agreed $27.75 per-share consideration for the studio and streaming assets and keeps the overall valuation at roughly $82.7 billion, but replaces stock with cash to increase certainty for shareholders and speed a vote.
According to the companies, Netflix would fund the transaction with a mix of on-hand cash, new debt, and committed financing — a signal to investors that it can close without relying on equity markets or waiting for share-price windows.
Why an All-Cash Offer Matters to Shareholders
Cash deals reduce exposure to market volatility and typically narrow merger-arbitrage spreads, which can be decisive in contested situations. By eliminating stock from the package, Netflix is telling Warner Bros. Discovery investors they won’t be betting on post-announcement swings in Netflix’s share price or longer integration timelines. The move also simplifies proxy materials and can accelerate the path to a shareholder vote.
Boards tend to favor bids with fewer moving parts when competing offers are close, and here the headline price differential is modest compared with the perceived execution risk. That calculus often outweighs a slightly higher nominal price, especially in a sector where deal approvals and financing conditions can shift quickly.
Paramount Skydance Turns Up the Heat on Netflix
Paramount Skydance has countered with an all-cash $30-per-share proposal for the entirety of Warner Bros. Discovery and lined up a high-profile backstop: a $40 billion support commitment from Oracle cofounder Larry Ellison, father of Skydance CEO David Ellison. The bid has been paired with a muscular tactics package — litigation seeking more detail on the Netflix offer, a push to nominate new Warner Bros. directors, and efforts to accelerate court timelines, which a judge has already declined to fast-track.
Warner Bros. Discovery’s board has continued to favor Netflix’s approach, arguing that the Paramount structure introduces more balance-sheet stress and operational risk for the combined entity. That posture forces Paramount Skydance to either raise its offer, sweeten terms, or change financing dynamics to win over undecided shareholders.
Financing And Balance Sheet Reality For Both Bidders
Netflix has cultivated a reputation for disciplined debt management after years of investment in originals began yielding multi-billion-dollar free cash flow. An all-cash offer leverages that credibility, along with access to investment-grade markets and bank syndicates willing to provide committed funds for marquee media assets like Warner Bros. Pictures, Max, and DC.
Paramount Skydance’s path is steeper. Warner Bros. Discovery has said the Paramount route could load the combined company with roughly $87 billion in debt, a figure that would amplify interest costs in a higher-rate environment. S&P Global downgraded Paramount to speculative grade in 2024, and both S&P and Moody’s have cautioned on negative free cash flow pressure across legacy TV businesses. That credit backdrop constrains how far Paramount can stretch without triggering further downgrades or punitive pricing.
Regulatory And Strategic Stakes For A Warner Bros. Deal
Any Warner Bros. deal would face antitrust scrutiny from the Department of Justice and the Federal Trade Commission. While Amazon’s acquisition of MGM ultimately cleared, the current enforcement climate is more aggressive and convergence among streamers raises horizontal concerns in both content libraries and distribution. Netflix is betting that a cleaner capital structure and a focused asset perimeter — studios and streaming — will help thread the needle compared with more complex roll-ups.
Strategically, Netflix would gain a powerhouse film and series pipeline, established franchises from DC to Wizarding World, and a deeper catalog to fuel engagement and advertising growth. The combination would also supercharge international distribution where Netflix already leads. Yet integration risk is real: reconciling release windows, sports rights, and brand architectures (Max and Netflix) will demand careful sequencing to avoid churn.
What To Watch Next As The Bidding Battle Intensifies
Near term, investors should look for a definitive vote timetable, the contours of any breakup fee, and whether a go-shop or fiduciary out allows rival bids to surface post-agreement. Also pivotal: clarity on Netflix’s committed financing syndicate and updated leverage targets, plus any signals from antitrust enforcers on scope and remedies.
If Paramount Skydance can de-risk its package — for example, by trimming leverage or adding cash backstops beyond the current commitment — it may justify the higher sticker price. For now, Netflix’s all-cash pivot improves its odds by giving Warner Bros. Discovery shareholders what markets prize most in contested M&A: speed, certainty, and a clear path to closing.
