Warner Bros. Discovery rejects Paramount’s $108.4 billion bid again

Warner Bros. Discovery has unanimously rejected Paramount Skydance’s revised $108.4 billion bid. On Wednesday, the company’s board urged its shareholders to instead vote in favor of its existing $82.7 billion deal with Netflix for its film and television studio assets.

The studio characterized the Paramount proposal as a “leveraged buyout”—an acquisition of another company using a significant amount of borrowed money—that would encumber Warner Bros. Discovery with $87 billion in debt. Warner Bros. Discovery called the offer “illusory” and noted that Paramount’s $14 billion market capitalization makes the required $94.65 billion in debt and equity financing highly risky. In a statement, the studio, Warner Bros. Discovery, wrote: “[Paramount] is a company with a $14 billion market capitalization attempting an acquisition requiring $94.65 billion of debt and equity financing, nearly seven times its total market capitalization […] This aggressive transaction structure poses materially more risk for WBD and its shareholders when compared to the conventional structure of the Netflix merger”. The studio further warned that the deal would worsen Paramount’s current “junk” credit rating.

The rejection follows a sequence of competing offers. Paramount went directly to Warner Bros. Discovery shareholders with an all-cash, $30-per-share offer in early December after the board decided to sell to Netflix. After the initial rejection, Paramount returned with a revised proposal featuring a $40 billion guarantee from Larry Ellison, the Oracle co-founder and father of Paramount CEO David Ellison, alongside plans to raise $54 billion in debt to fund the deal.

To highlight the differences between the two offers, Warner Bros. Discovery contrasted the financial profiles of the competing proposals:

• The Paramount Skydance Bid: A $108.4 billion proposal requiring $94.65 billion in debt and equity financing, representing nearly seven times Paramount’s total market capitalization of $14 billion.
• The Netflix Deal: An $82.7 billion conventional merger with a company that has a market capitalization of approximately $400 billion, an investment-grade balance sheet, an A/A3 credit rating, and estimated free cash flow—cash generated by a company after accounting for cash outflows to support operations and maintain capital assets—of more than $12 billion for 2026.

Netflix welcomed the decision, stating that the merger would bring together highly complementary strengths and a shared passion for storytelling.

Why it matters

The rejection underscores the high-stakes consolidation in media, where established players like Warner Bros. Discovery are prioritizing balance sheet stability and proven cash flow over aggressive, debt-heavy acquisition attempts.