Despite The Headlines, Paramount Skydance Bid For WBD Likely To Fail

The Warner Bros. Discovery and Paramount logos appear on a smartphone screen in this illustration photo in Reno, United States, on December 15, 2025 (Photo Illustration by Jaque Silva/NurPhoto via Getty Images).

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When the Warner Bros. Discovery (WBD) board announced early Tuesday that it was reopening merger talks with Paramount Skydance (PSKY)there were a lot of think pieces published by industry reporters which argued some combination of “Netflix’s bid is in trouble,” and “Paramount Skydance has a second chance to win Warner Bros. Discovery!”

The problem is that both of those takes are likely to be – as Wall Street experts have been known to say – a bunch of hooey.

There are a few things to remember about the details of these negotiations and that will help you to frame things in the proper light. First of all, the negotiations between WBD and PKSY could not have reopened without Netflix’s approval. When the WBD board initially decided that Netflix had the best offer, the two companies signed an exclusive agreement that prevented any other party from negotiating directly with Warner Bros. Discovery.

Given that, it’s unlikely that Netflix would have agreed to allow for an additional seven days of negotiations with PSKY if it wasn’t convinced those talks wouldn’t impact the final outcome.

Reopening Negotiations Provides Legal Cover For WBD Board

But reopening the talks between WBD and PSKY also gives some legal cover to the Warner Bros. Discovery board. Because PSKY couldn’t negotiate directly with the WBD board, executives have been strategically leaking updated offers to reporters, essentially negotiating through the press. At the same time, PSKY owner David Ellison has complained that Warner Bros. Discovery won’t consider its now superior offer. Which WBD couldn’t consider because of the exclusivity with Netflix. Ellison has also threatened to sue the WBD for its “failure” to reconsider its plans.

So reopening these talks allows the Warner Bros. Discovery board to formally hear the updated “final” offer from Paramount Skydance, then release a statement saying “We carefully considered the offer, but we still find the Netflix deal to be superior.” While it’s possible Ellison might still sue, this move makes it much more difficult for him to win.

New Offer From PSKY Doesn’t Seem To Substantially Change Things

While we still don’t know all the specifics about the revised PSKY offer, it’s public knowledge that the company boosted its offer to $31 a share (versus the $27.75 per share offered by Netflix). But PSKY wants to buy the entire company, while Netflix is only interested in the WB films and television studios, the iconic Warner Brothers production lot and some other assorted properties (such as WB Games and TCM).

The Netflix offer values the studio part of the company at $82.7 billionwhile Paramount’s offer values the entire company at $108.4 billion.

The remainder of the revised PSKY offer has to do with some fairly esoteric financing changes, as well as an offer from PSKY to pay the deal cancellation fee that would be due to Netflix if WBD walks away from their negotiations.

But at the end of the day, I haven’t seen anything that will really change many minds on the Warner Bros. Discovery board. In part, because Netflix has the contractual ability to match any offer WBD receives. But also because making a deal with Netflix allows WBD executives and major shareholders to take advantage of a very esoteric tax sheltering schemewhich would save them millions of dollars when the deal closes.

So my advice is that when you see the overhyped headlines about these negotiations, keep in mind that despite all of the hype, there are some clear-cut financial guardrails in place that limit what is possible at this point.

Netflix remains the clear favorite in this race, unless something entirely unexpected happens between now and when the Warner Bros. Discovery board is expected to approve the Netflix offer at their March 20th meeting.