Despite a sweetened offer and massive financial guarantees, it looks like Warner Bros. Discovery (WBD) is getting ready to say “no” to Paramount Skydance yet again.
According to people close to the negotiations, WBD’s board is scheduled to meet next week to review the latest terms from the aggressive bidder. However, the prevailing mood in the boardroom hasn’t shifted: they remain unconvinced that the Skydance proposal beats the competing deal already on the table from Netflix Inc.
The Tug-of-War
Paramount Skydance, steered by CEO David Ellison and backed by the deep pockets of his father, Oracle co-founder Larry Ellison, has been chasing Warner Bros. for months. But they are trying to break up a romance that has already started. WBD has previously agreed to terms with Netflix in a deal valued at roughly $27.75 a share. That agreement, which involves Netflix acquiring WBD’s studio and streaming operations, is the board’s favorite, largely due to Netflix’s market dominance and the simplified structure of the transaction.
Skydance, however, isn’t taking the hint. They went public with a $30-a-share all-cash offer on December 8, just three days after the Netflix handshake. Since then, the Ellisons have been frantically revising their bid to make it undeniable. They’ve added a personal guarantee from Larry Ellison to the tune of $40.4 billion in equity support, along with ironclad promises to cover debt and deal costs.
Despite this, insiders say the WBD board is holding out, with some shareholders urging Skydance to dig even deeper into their pockets.
DEFCON 1
The rejection has reportedly led to boiling frustration within the Paramount Skydance camp. The Ellisons and their financial partner, Gerry Cardinale of RedBird Capital, feel like the goalposts keep moving. They view WBD’s hesitation as a series of “excuses” designed to protect the Netflix deal.
The Skydance argument is simple: We are buying the whole house; Netflix is just buying the furniture. They argue that the Netflix partial acquisition would leave the remainder of Warner Bros. Discovery hobbled by $15 billion in debt, clinging to cable assets that are rapidly losing value as viewers cut the cord.
Tensions are so high that Skydance is reportedly prepping a “DEFCON 1” strategy. If they can prove the bidding process was skewed against them, they are prepared to take the matter to court.
The Personal Element
WBD CEO David Zaslav has firmly denied any favoritism, insisting the preference for Netflix provides the company with more stability. However, critics in the Ellison camp suspect that personal relationships—specifically Zaslav’s ties to Netflix co-CEO Ted Sarandos—might be influencing the decision. Others close to the deal dismiss the gossip, insisting it strictly comes down to the numbers.
Is There a Magic Number?
While the two sides seem to be at an impasse, there is a glimmer of a compromise. Sources indicate that Zaslav has dropped hints that he might be open to a higher bid—specifically, a price point around $34 a share. If the Ellisons decide to meet that figure, it could force the board to reopen negotiations.
For now, the entertainment industry is holding its breath. With massive egos involved and the future of Hollywood institutions like HBO and CNN on the line, the outcome of this power struggle remains uncertain—unless the Ellisons make an offer that Warner Bros. simply cannot refuse.
