Netflix Prepares All-Cash Bid for Warner Bros. Discovery Amid Paramount Pressure

The deal between Netflix and Warner Bros. has hit a snag and is now moving in a new direction. Variety reports that Netflix is planning a new, all-cash offer for Warner Bros. Discovery’s studios and streaming services. This shows how competitive – and sometimes aggressive – the battle to acquire these media assets has become.

So, Netflix announced back in early December they were trying to buy Warner Bros. Discovery – it was a huge deal, valued at around $82.7 billion, a mix of cash and Netflix stock. But things have gotten complicated. The market’s changed, and now Netflix is having to adjust their offer. Plus, there’s another company trying to completely derail the whole thing, and Wall Street is starting to sweat a bit. It’s become a real nail-biter to see if this deal will actually go through!

Netflix Reconsiders Stock-Based Structure

Originally, Warner Bros. Discovery shareholders were set to receive $23.25 in cash and $4.50 worth of Netflix stock for each share they owned. However, this deal relied on Netflix’s stock price staying above a certain level, which unfortunately didn’t happen.

Since the deal was announced on December 5th, Netflix’s stock price has fallen by over 12%, dropping below $97.91 per share. Because of this drop, the value of the stock portion of the deal will be lowered, ultimately reducing the overall payment Warner Bros. Discovery shareholders will receive.

Netflix stock finished the day at $90.32, leading people to question if the initial agreement was still beneficial for both companies involved.

According to reports first published by The Wall Street Journal and previously suggested by Bloomberg, Netflix is planning to drop its stock offering and make a cash-only bid. Netflix has not confirmed these reports, and Warner Bros. Discovery has directed all questions back to Netflix.

Paramount Skydance Applies Maximum Pressure

Netflix’s recent strategic shift isn’t happening in isolation. The agreement between Netflix and Warner Bros. is now facing strong competition from Paramount and Skydance, who are actively working to challenge it.

Paramount Skydance has made an unsolicited offer to buy Warner Bros. Discovery for $30 per share in cash. This offer is more valuable than what Netflix is currently worth after its stock price recently dropped. Paramount Skydance has also:

Filed a lawsuit demanding disclosure of Netflix deal financials
Challenged the valuation of the planned Discovery Global cable spin-off
Announced a proxy fight to replace Warner Bros. Discovery board members

Paramount believes the proposed deal with Netflix isn’t beneficial for its shareholders, and that it carries financial risks due to the unpredictable nature of Netflix’s stock price. According to Paramount’s analysis from January 8th, the deal now values Warner Bros. Discovery at $27.42 per share, which is lower than Paramount’s original offer.

This legal and shareholder pressure has clearly altered the negotiating landscape.

What Netflix Would Acquire — and What It Wouldn’t

It’s also worth noting the scope of Netflix’s interest. Under its deal, Netflix would acquire:

Warner Bros. film studios
Warner Bros. television studios
HBO and HBO Max
Warner Bros. Discovery’s gaming division

Importantly, Netflix won’t be buying the whole company. Warner Bros. Discovery is planning to separate its traditional cable channels into a new company called Discovery Global. Paramount has criticized this plan, suggesting it could harm shareholders, pointing to a similar attempt by NBC Universal that didn’t succeed.

Unlike other proposals, Paramount Skydance is offering to buy all of Warner Bros. Discovery. This complete acquisition could be a key factor for shareholders when considering the potential long-term benefits.

The Debt Question and Financing Reality

Netflix initially proposed a deal involving $59 billion in borrowed money, with Wells Fargo, BNP, and HSBC reportedly providing support. While any offer still requires financing, paying entirely in cash makes the deal more secure for shareholders who are hesitant about offers that include company stock, especially given the current unstable market.

Paramount Skydance has strong financial backing from investors like Larry Ellison, RedBird Capital Partners, and wealth funds representing Saudi Arabia, Qatar, and Abu Dhabi. This support gives them confidence they can finalize any deal quickly and efficiently.

Regulatory Approval Looms as a Major Obstacle

The proposed merger between Netflix and Warner Bros. is facing a major challenge: getting approval from regulators. Since the deal would combine the leading streaming service with a major Hollywood studio and its vast collection of movies and shows, officials in the U.S. and other countries are closely examining it to ensure it doesn’t violate antitrust laws.

Okay, so this Netflix-Warner Bros. merger doesn’t need the FCC’s okay, which is good news for them. But it’s not a free pass. It absolutely has to get looked at by the Department of Justice and other groups that make sure competition stays fair. What everyone’s watching closely is just how much of the streaming market this new company would control. Regulators are going to be digging deep to see if this merger would actually hurt consumers by stifling competition. It’s a crucial step, and could definitely change things.

Political influence is increasingly affecting how regulations are made. President Trump publicly opposed the deal, sharing an article from One America News Network on his social media platform that called on regulators to prevent Netflix from dominating popular culture.

As a movie fan, I’ve been following the news about Netflix possibly buying Warner Bros. Discovery, and it sounds like Trump has some concerns too. He’s already hinted that the deal could be trouble because it would create a really big company with a lot of power in the entertainment industry, and he’s suggesting he might actually weigh in during the government’s review of the whole thing.

These changes mean that even if Netflix successfully acquires Skydance and gets the okay from its shareholders, the hardest part might be getting official approval from regulators. This is because the deal will likely face scrutiny involving political, cultural, economic, and legal issues.

A Deal No Longer on Autopilot

The potential merger between Netflix and Warner Bros., which initially seemed simple, has turned into a complex and contentious battle. It now involves legal disputes, power struggles between shareholders, and changes to the original agreement. Netflix’s flexibility in adjusting its offer shows they recognize the possibility of the deal falling apart.

Warner Bros. Discovery investors are now facing a clear decision. They’re choosing between two very different plans for the company’s future, with two determined buyers battling for control of its incredibly valuable collection of movies and TV shows.

2026-01-14 17:03