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Board Draws a Clear Line

Warner Bros. Discovery’s board has unanimously advised shareholders to reject a hostile takeover attempt from Paramount Skydance, instead endorsing a merger proposal from Netflix that it says offers greater certainty, stronger financing, and a clearer path to closing.

The recommendation follows Paramount’s decision last week to bypass management and take a $30-per-share, all-cash tender offer straight to WBD shareholders. That bid values Warner Bros. Discovery at an enterprise value of roughly $108.4 billion and sets up one of the most closely watched media battles in years.

Why the Board Favors Netflix

According to WBD chair Samuel Di Piazza, the decision was straightforward after reviewing both proposals. He said the Netflix deal provides a more reliable structure, with fewer execution risks and stronger financial backing.

Netflix’s offer values WBD’s streaming and studio assets at about $72 billion in equity value, or roughly $83 billion on an enterprise basis including debt. Under the proposal, WBD’s cable networks would be spun off into a separate company, allowing Netflix to focus on premium content, theatrical films, and the HBO brand.

Di Piazza emphasized that Netflix’s bid is backed by cash and stock, includes a substantial termination fee, and does not rely on outside equity financing. With a market capitalization exceeding $400 billion and an investment-grade balance sheet, Netflix is viewed by the board as a counterparty with unquestioned ability to close.

Paramount’s Offer and Its Risks

Paramount Skydance CEO David Ellison has argued that his company’s all-cash proposal is superior in headline value and could face fewer regulatory hurdles. He has also signaled that the $30-per-share bid is not necessarily his final offer, leaving the door open to a higher price.

However, the WBD board raised concerns about the financing structure behind the Paramount bid. More than $40 billion of the funding is not directly backed by the Ellison family, despite public assurances of a full backstop. The financing mix also includes approximately $24 billion from Gulf sovereign wealth funds, and recently lost support from Affinity Partners after the firm exited its involvement.

In communications to shareholders, the board made clear it would want a larger, more explicit financial commitment from the Ellison family if Paramount were to return with a revised proposal.

Certainty of Close Takes Priority

For WBD directors, the central issue is not just valuation but certainty. Di Piazza said the board was uncomfortable with lingering questions around whether all financing would be firmly in place at closing, particularly given the scale and complexity of the transaction.

He contrasted that uncertainty with Netflix’s proposal, which he described as clean, fully financed, and operationally responsive to the issues WBD raised during its strategic review. In his words, striking a deal is important, but successfully closing it matters more.

Regulatory Questions Remain, But Confidence Is High

Both proposed transactions would face scrutiny from U.S. antitrust regulators. Di Piazza dismissed the idea that either deal is unworkable, saying both would need to make their case before the Department of Justice.

Netflix executives echoed that confidence. Co-CEO Ted Sarandos said the process produced the best outcome for consumers, creators, and shareholders, highlighting the strategic fit between Netflix’s global platform and Warner Bros. Discovery’s studios and HBO brand. Co-CEO Greg Peters added that Netflix’s scale, balance sheet strength, and complementary audience base position it well to defend the deal if regulators challenge it.

Shareholders and the Next Steps

Warner Bros. Discovery plans to hold a shareholder vote in the spring or early summer, though an exact date has not yet been set. In the meantime, Paramount retains the option to sweeten its bid, keeping competitive pressure on the process.

Some investors are watching closely. Mario Gabelli, whose firm holds WBD shares, said continued competition between bidders could ultimately benefit shareholders by driving improved terms.

For now, however, the board’s message is unambiguous. From its perspective, the Netflix transaction delivers stronger value, greater certainty, and a clearer strategic future for one of the world’s most storied media portfolios.