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Warner Bros Discovery has formally urged its shareholders to reject Paramount Skydance’s $108.4 billion takeover bid, backing instead a previously announced $72 billion deal with Netflix that the board says offers stronger long term value and lower risk.
In a unanimous recommendation disclosed in a legal filing, the Warner Bros Discovery board said the Paramount Skydance proposal presents “numerous and significant risks” and rejected claims that it is financially superior to the Netflix agreement. Paramount had argued that its offer, backed by the billionaire Ellison family, exceeded Netflix’s bid in overall value and scope.
The decision marks a dramatic turn in the battle for control of one of Hollywood’s most storied studios. Warner Bros Discovery put itself up for sale in October after receiving multiple expressions of interest, including approaches from Paramount Skydance. On December 5, the company announced it had agreed to sell its film studio and streaming business to Netflix.
In its filing, Warner Bros Discovery also disputed assertions that the Ellison family was providing direct financial backing for the Paramount bid, stating that the funding structure carried uncertainty and heightened execution risk. By contrast, the board said Netflix’s proposal is well financed, presents fewer regulatory hurdles, and provides clearer value for shareholders.
Netflix welcomed the recommendation. In a letter to shareholders, as reported by media outlets, the board wrote that Paramount had “consistently misled” Warner Bros shareholders that its $30-per-share cash offer was fully guaranteed, or “backstopped,” by the Ellison family, led by billionaire and Oracle CEO Larry Ellison.
“It does not, and never has,” the board wrote of the guarantee of Paramount’s offer, noting that the offer posed “numerous, significant risks.”
The two bids differ significantly in structure as well. Netflix plans to acquire Warner Bros’ movie studio and HBO streaming service, gaining access to its extensive content library while leaving Warner Bros to spin off its pay television networks, including CNN and TNT, into a separate entity.
On the other hand, Paramount Skydance is seeking to acquire Warner Bros Discovery in its entirety. That includes its television networks, which would place competing assets such as CBS, MTV, and Showtime under one roof.
Analysts say a full takeover by Paramount could face intense examination in the United States and Europe over reduced competition and consumer choice as consolidation accelerates across the entertainment industry.
Despite the board’s recommendation, the takeover saga may not be over. Paramount Skydance could return with a revised offer, potentially prolonging a process that analysts expect to take months to resolve.
