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Paramount Ups the Ante in High-Stakes Battle for Warner Bros. Discovery
Paramount Global has significantly intensified its pursuit of Warner Bros. Discovery (WBD), adding major financial incentives to its bid in an aggressive attempt to derail a competing offer from Netflix. This latest move by Paramount’s leadership, headed by David Ellison, is designed to remove the financial hurdles that currently tie WBD to the Netflix deal.
The New Financial Incentives
The most significant part of Paramount’s revised offer is the commitment to cover the "breakup fee." If Warner Bros. Discovery decides to walk away from its existing agreement with Netflix, they would owe Netflix a staggering $2.8 billion penalty. Paramount has now officially pledged to pay this entire amount themselves, effectively making it "free" for WBD to switch sides.
Additionally, Paramount has introduced a "ticking fee" to protect WBD shareholders against long-term uncertainty. If the merger faces regulatory delays and isn't completed by the start of 2027, Paramount will pay shareholders an extra $650 million every quarter until the deal closes. This provides a safety net that Netflix’s current offer lacks.
A Difference in Strategy
While Netflix is primarily interested in acquiring WBD’s massive library of movies and shows to boost its streaming platform, Paramount is proposing a total corporate union. This merger would combine two of Hollywood’s most iconic "Big Five" studios into a single media powerhouse. Paramount’s bid includes everything under the WBD umbrella, including HBO, the DC Universe, and news giant CNN.
The Road Ahead
Even with these new sweeteners, the offer remains at $30 per share. Paramount’s strategy isn't necessarily to pay a higher price per share, but to make their deal the safest and most logical choice for the board of directors.
The WBD board is now tasked with deciding whether to stick with the tech-heavy future offered by Netflix or embrace a traditional media consolidation with Paramount. A final decision and a shareholder vote are expected to take place in the coming months, likely by mid-spring.
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