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Prioritizing a massive $82.7 billion merger with Netflix, the board of Warner Bros. Discovery has unanimously turned down an improved buyout offer from David Ellison’s Paramount Skydance. Chairman Samuel Di Piazza explained that the Netflix deal—which includes the sale of the WBD studio and HBO—remains the superior option across "multiple key areas." The decision reinforces WBD’s commitment to the strategic pivot it finalized last December, despite continued pressure from rival bidders.
"Paramount's offer continues to provide insufficient value," he continued.
In a letter to shareholders, Di Piazza wrote that Paramount Skydance's offer carries "significant costs, risks and uncertainties as compared to the Netflix merger." The way the Paramount deal is structured creates a "lack of certainty" about its finalization, he added.
Di Piazza adds in the letter that if the company were to agree to the Paramount merger and it failed to close, it would result in a "potentially considerable value destruction."
"What matters most right now is our focus as we start the year," Warner Bros. Discovery CEO David Zaslav said in a memo to employees. "Our operating plans remain unchanged, and our priorities for 2026 are clear and intentional.”
Zaslav wrote that the "review was conducted with discipline and rigor, and was supported by independent financial and legal advisors."
On Dec. 22, Paramount Skydance increased its offer for Warner Bros. Discovery with a personal guarantee from billionaire Larry Ellison, who was backing the financing for the deal. His son, David Ellison, is the CEO of Paramount Skydance. However, that was not enough for Warner Bros. Discovery. That beefed-up offer followed Warner Bros. Discovery's Dec. 17 public rejection of Paramount. It also preceded multiple private rejections before Paramount Skydance went public.
At stake is the future of one of the most storied media empires in the United States.
Warner Bros. Discovery controls properties ranging from CNN Worldwide and the Discovery Channel to HBO, as well as the Warner Bros. film studio and archive.
Despite the back and forth between Warner Bros. Discovery and Paramount, Netflix has so far proceeded with the deal it inked Dec. 5, under which the world’s largest streaming company would acquire a stake in WBD.
Warner's cable networks would be spun out into a separate company as part of that deal. However, Paramount Skydance wants to buy everything Warner Bros. Discovery owns.
Paramount's controlling shareholders, the Ellisons, have suggested they could obtain regulatory clearance more quickly and easily than Netflix.
