Warner Bros. Discovery has officially come out against Paramount and Skydance’s attempt to take over the company, asking shareholders to vote down their latest $108 billion offer. Warner Bros. believes the deal doesn’t offer enough money and carries significant risks. This shows how much disagreement there is between the companies, and why Warner Bros. thinks the offer could ultimately hurt its shareholders’ investments.
The revised offer, supported by Paramount and Skydance Media, now includes a significant personal financial guarantee from Oracle’s Larry Ellison. However, Warner Bros. Discovery’s board determined the offer still doesn’t provide enough value or security, especially when weighed against their current agreement to sell assets to Netflix.
Warner Bros. Discovery Calls the Bid “Inadequate”
Warner Bros. Discovery’s board has told investors that Paramount’s latest offer isn’t significantly better than their previous one. Although the proposed deal is still valued at $108 billion, the board points out it relies heavily on borrowing money and isn’t as secure or straightforward as their current agreement with Netflix.
The board didn’t believe Paramount’s offer was a better option, stating it wasn’t as good as, or even similar to, the deal with Netflix. Warner Bros. Discovery felt the Netflix agreement was simpler to complete, had fewer limitations, and carried much less risk of legal or financial problems.
Debt Concerns Loom Large
Warner Bros. Discovery has pointed to the large amount of debt needed to buy Paramount as a major concern. Their assessment shows that Paramount, being much smaller than Warner Bros. Discovery, would need to borrow and raise investment funds totaling tens of billions of dollars to complete the deal.
The company cautioned investors that the acquisition might be the biggest of its kind, potentially creating a heavy debt load for the new entity. This is happening at a difficult time for media companies, which are already facing falling profits from traditional TV and tougher competition from streaming services.
Despite Larry Ellison’s promise of billions of dollars, Warner Bros. Discovery worried that the way the deal was financed could create too much risk for its investors.
Litigation and Operational Restrictions
In addition to financial worries, Warner Bros. Discovery also highlighted potential legal issues with Paramount’s offer. They suggested that a deal with Paramount Skydance could lead to lawsuits, making it uncertain if the agreement would go through without problems.
According to reports referenced by Warner Bros. Discovery, Paramount might take strong legal action if its board keeps refusing the offer. Warner Bros. Discovery believes this possibility adds more doubt to the deal and could lead to a lengthy and expensive court fight for shareholders.
Warner Bros. Discovery also cautioned that acquiring Paramount could create major limitations on how they run their business. Specifically, a part of the agreement could prevent them from separating their cable TV businesses into a new, independent company. If the deal falls through, company owners might find themselves unable to move forward with important plans for as long as 18 months.
Netflix Deal Still Viewed as Superior
Following Warner Bros. Discovery’s rejection of Paramount’s offer, the company reaffirmed its preference for the existing deal with Netflix. This agreement would see Netflix acquire Warner Bros. Discovery’s film and streaming businesses, while allowing the company to spin off and restructure its cable networks, including CNN.
The board believes the agreement with Netflix is a more secure, straightforward, and less problematic option compared to Paramount’s attempt to take over the company against its will.
Industry and Antitrust Scrutiny
The proposed deal with Paramount is also getting attention from across the film industry. Cinema United, which represents movie theaters, has expressed worries that either the Netflix or Paramount plans could significantly change how movies are shown and distributed.
Paramount’s proposed deal could give one studio control over a large share of the movie theater market in the US, which might lead to investigations by antitrust regulators and hold up the process.
What Happens Next?
Warner Bros. Discovery is actively asking its shareholders to reject the revised offer, making Paramount’s attempt to take over the company much more difficult. Ultimately, the shareholders will decide whether to listen to the board’s advice and vote against the deal, or to move forward with Paramount’s offer despite the potential downsides.
Warner Bros. Discovery has clearly stated it doesn’t want Paramount to merge with it, and its board is urging shareholders to agree.
With the debate over media company mergers growing more heated, this conflict is becoming one of the biggest and most fiercely fought corporate struggles the entertainment world has seen in a long time.
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2026-01-07 23:57