- Netflix transforms its offer for Warner Bros Discovery's studios and streaming business into a 100% cash offer.
- The deal is valued at approximately $82.700 billion, with WBD, focused on studios and HBO/HBO Max, trading at $27,75 per share.
- Paramount Skydance competes with a superior offer in total value, but with greater debt and more financial risk.
- The acquisition would strengthen Netflix's global leadership in streaming and production, pending regulatory approvals and shareholder votes.
The movement of Netflix to redesign its offer for Warner Bros Discovery (WBD) This has definitively ignited the battle at the top of the entertainment industry. The platform has decided to abandon the mixed cash and stock option and is now opting for an all-cash payment, a move that seeks to provide greater certainty for WBD shareholders and expedite the approval process.
With this maneuver, the giant of streaming It aims to secure control of Warner Bros.' historic Hollywood studios and HBO/HBO Max's streaming business.excluding the cable television business. Meanwhile, Paramount Skydance is pressing forward with a higher counteroffer in total value, which has led to a financial, media, and regulatory battle that could completely redefine the global landscape of the sector.
A reformulated offer: all cash and the same price per share
The key to the new approach is that Netflix maintains its overall valuation of the deal at around $82.700-83.000 billionBut the payment method changes completely. The offer still values each Warner Bros. Discovery share at $27,75, excluding debt, but eliminates the Netflix stock component of the initial agreement.
In the first proposal, WBD shareholders were to receive $23,25 in cash and $4,50 in Netflix common stock for each shareThe collapse of Netflix's share price in recent months - with drops that various analysts place between 15% and 25%-30% since the initial announcement of the operation - has led the company to rethink that structure to prevent stock market volatility from continuing to undermine the attractiveness of the offer.
Now The payment will be entirely in cash: $27,75 per share in cashAccording to documentation submitted to the US market regulator, the Los Gatos-based company will finance the purchase through a combination of available cash, existing credit lines, and committed financing from a broad syndicate of Wall Street banks.
The transaction, which does not include Warner Bros Discovery's debt, It is supported by Netflix's strong cash flow generation and its investment-grade credit rating., a point that WBD itself highlights as a differentiating factor compared to Paramount's more delicate financial situation.
Netflix's board of directors has unanimously approved the revised structure, which maintains the total amount of the transaction but offers greater clarity on the value that WBD shareholders will receive at closingThe company insists that the all-cash scheme fits with its “disciplined” capital allocation framework and will allow it to continue addressing future strategic priorities.
What assets does Netflix want and how will the business be separated from Warner?
Netflix's offer is not directed at the entire Warner Bros Discovery conglomerate, but at a very specific part of the group. The target is Warner Bros.' film and television studios and HBO/HBO Max's streaming business.That is, the creative and premium content distribution core that has given rise to such profitable franchises as Harry Potter, Game of Thrones or DC superheroes, as well as prestigious series like The Sopranos o The West Wing of the White House.
To fit the operation, Warner Bros Discovery plans to spin off its operations into two independent publicly traded companies.On one side will remain the subsidiary focused on film, television fiction, and the streaming (the perimeter that Netflix aspires to); on the other hand, the cable television business grouped under Discovery Global, where channels such as CNN, TNT or Discovery would be integrated.
WBD itself has detailed that The separation between Warner Bros and Discovery Global should be completed within six to nine months.and that this spin-off must be completed before the final closing of the agreement with Netflix. In this way, current WBD shareholders will retain, in addition to the cash payment from Netflix, the potential value of its stakes in Discovery Global, which will become an independently listed company..
This structure has become one of Netflix's central arguments to defend the fact that, despite offering less money in absolute terms than Paramount Skydance, Their proposal generates a more attractive combined value for WBD shareholders.: an immediate cash sum and future exposure to the evolution of Discovery Global.
In terms of impact on the European and Spanish market, integration This could strengthen the availability of major Warner and HBO franchises in Netflix's catalog in the region.This has implications for local operators and existing licensing agreements. Although specific changes for Europe have not yet been detailed, the importance of the EU market in Netflix's strategy suggests a significant rollout of this content in the EU if the deal goes through.
Expected timeline, shareholder voting and regulatory front
The review of the offer doesn't just affect the financial structure. Netflix and Warner Bros Discovery They want to accelerate, as much as possible, the deadlines for shareholders to make their decision.According to both groups, the new cash payment formula should allow the vote to take place in April 2026, provided the preconditions are met.
Warner Bros Discovery intends to to convene an extraordinary shareholders' meeting to submit Netflix's proposal for approvalAlthough the specific date of the meeting has not yet been made public, both the WBD and Netflix boards have unanimously approved the revised merger agreement.
The transaction remains conditional, however, on several milestones. First, It is essential to complete the separation of Discovery Global in the manner stipulated in the original agreement signed on December 5. Furthermore, it will be necessary to obtain all relevant regulatory approvals in the United States and other relevant markets, something that has already raised concerns among analysts and competition experts.
The combined size of Netflix and the assets of Warner Bros and HBO This would make the resulting group the largest film producer and one of the largest streaming platforms on the planet.This will likely trigger rigorous scrutiny by competition authorities in both the US and the European Union.
Finally, the transaction is subject to the usual closing conditions and final approval from WBD shareholdersUntil they make a final decision, the company will remain formally open to considering other proposals, although management has already indicated on several occasions that it considers the agreement with Netflix to be superior.
The battle with Paramount Skydance: lawsuits, counteroffers and debt
While Netflix refines its offering, Paramount Skydance (PSKY) is maintaining a parallel offensive to gain full control of Warner Bros DiscoveryTheir offer amounts to about $30 per share, which equates to more than $108.000-108.400 billion for 100% of the group, including the cable television division with CNN, TNT and other channels.
This offer, more generous in gross amount, It relies on much higher levels of debtVarious estimates place Paramount's resulting debt at around $87.000 billion, compared to nearly $85.000 billion for Netflix. However, the difference in size between the two groups—with Netflix having a much higher market capitalization—makes the proposed acquisition by the streaming platform... streaming According to analysts, it will be less leveraged and potentially more sustainable.
Paramount has also opted for legal action to put pressure on Warner. The company has filed a lawsuit in a Delaware court against WBD In order to force Warner to disclose all the financial details of Netflix's offer and question why the Warner board preferred that proposal to their own, the company led by David Ellison has also announced its intention to nominate an alternative slate of directors to WBD's governing body in an attempt to block the Netflix deal.
Despite the improvements introduced by Paramount - including a Irrevocable personal guarantee of Larry Ellison, co-founder of OracleFor an amount exceeding $40.000 billion, the Warner Bros Discovery board has repeatedly rejected the proposal, deeming it insufficient in terms of risk-adjusted value.
WBD officials emphasize that Paramount's offer incorporates a volume of debt financing clauses that significantly increases the execution risk and reduces shareholder protections should the deal fall through. Conversely, they insist that the binding agreement with Netflix offers greater certainty, less financial complexity, and less exposure to potential credit market stress.
The dispute has also moved into the reputational arena. While Paramount accuses Netflix of a lack of transparency and tries to directly entice WBD shareholders with its all-cash offer for the entire group, Netflix insists that its proposal best balances price, risk, and future value, thanks in part to the separation of Discovery Global and the strength of its balance sheet.
Sarandos, Zaslav, and the promise to keep cinemas and jobs open
Beyond the numbers, The key executives involved have stepped up their public presence to defend the strategic fit of the dealTed Sarandos, co-CEO of Netflix, has taken the lead in the offensive and has increased his appearances in leading US media outlets to explain why, in his opinion, the future of Warner Bros Discovery fits better under the Netflix umbrella than under that of Paramount.
In a recent interview, Sarandos stated that He sees only two possible outcomes: that Warner ends up being integrated into Netflix or Paramount.He argued that his company would be the buyer most committed to the studio's legacy. According to the executive, Netflix's plan involves maintaining Warner Bros.' traditional theatrical operations, preserving the HBO brand, and continuing to boost television production through Warner Bros. Television, thus preserving jobs and the industry.
To dispel the doubts of the exhibiting sector, the Netflix executive has committed to Warner's new productions continue to be released in theaters with a minimum window of 45 days.This aligns with the studio's current practice. Sarandos contrasts this view with Paramount's strategy, which he accuses of prioritizing cost-cutting, staff reductions, and a lower volume of releases to improve short-term margins.
From the other side of the table, David Zaslav, president and CEO of Warner Bros Discovery, has publicly endorsed the revised agreement with Netflix.Describing it as another step toward combining “two of the world’s leading storytelling companies,” Zaslav emphasizes that the 100% cash consideration offers greater certainty to shareholders while also allowing them to benefit from the potential of Discovery Global’s brands following their separation.
WBD Chairman Samuel A. Di Piazza Jr. also emphasized that The design of the agreement with Netflix offers greater protection to shareholders against the uncertainties linked to the high debt that Paramount would assume.According to the executive, the deal with Netflix not only ensures an attractive cash value, but also avoids exposing WBD to an excessively aggressive financing scenario in a context of still high interest rates.
Impact on the streaming ecosystem and the strategic value of the catalog
If the operation is completed, the effect on the global entertainment landscape would be profound. Netflix would then control one of the most valuable catalogs in the history of film and television.with iconic titles such as Casablanca, Singing under the rain, The Godfather, the universe of Harry Potter, the wide repertoire of DC superheroes (Batman, Superman and company) and the big HBO productions.
This integration would allow the platform to strengthen its position against other giants like Disney+, Amazon Prime Video or Apple TV+This would consolidate its commitment to high-budget, critically acclaimed content. For Europe and Spain, where HBO and HBO Max already have a loyal fan base, the change in ownership could translate, in the medium term, into unification of catalogs, possible reordering of premieres and renegotiation of rights with local operators and platforms. Furthermore, this situation calls for a review of a total platform comparison to assess the new competitive balance.
Meanwhile, the Los Gatos-based company would continue to push its hybrid business model, based on both ad-free subscriptions and its growing ad-supported offerings. This would include the potential control of advertising inventory associated with major Warner and HBO franchises. This could increase Netflix's commercial appeal in the European market.where advertisers especially value content with large audiences and a high degree of audience loyalty.
However, industry analysts point out that The accelerated consolidation of the streaming market raises regulatory and competition questions.This is especially true in the European Union, where the European Commission closely monitors the bargaining power of large platforms over independent producers and distributors. An integration of this magnitude could lead to specific conditions or commitments regarding licensing and access to content.
Meanwhile, Netflix continues to face its own stock market challenges. The sharp decline in its share price since its latest earnings report—with some estimates suggesting a drop of nearly 30%—has fueled fears of slowing subscriber growth and a more demanding regulatory environment. The company believes that a transformative transaction like the Warner acquisition will strengthen its leading position. and open new avenues for monetization in all its markets, including the European one.
The battle between Netflix and Paramount Skydance for control of Warner Bros. Discovery is being played out on several levels: price, debt, regulatory risk, and promises about the studio's creative future. With a The offer has been reformulated to ensure payment is made entirely in cash, has explicit backing from the WBD board, and includes a plan focused on maintaining production, theatrical releases, and employment.Netflix has, for now, managed to position itself advantageously. It remains to be seen how regulators will respond, how credit markets will evolve, and, above all, what Warner shareholders will ultimately decide, as their vote will determine whether the world's largest content producer comes under the umbrella of the streaming platform. streaming Leader.
