Paramount Drops $100 Billion All-Cash Bid to Poach Warner Bros From Netflix; Response Due in 10 Business Days

So, Netflix thought it had Warner Bros. Discovery basically locked up. Not so fast: Paramount just crashed the party with a bigger, all-cash offer and went straight to WBD shareholders instead of playing nice with the board. That is a bold move, and the timing is not an accident.

Here is the lay of the land: a few days after Netflix announced a tentative deal to buy Warner Bros. Discovery, Paramount submitted an all-cash bid of about $100.7 billion. That tops Netflix's $82.7 billion offer by roughly $18 billion. Paramount also says WBD barely engaged with its earlier attempts to negotiate, so it is taking the proposal public and directly to investors.

Paramount is throwing in a creative-friendly sweetener too: a promise to preserve theatrical release windows for major films, which is very much aimed at filmmakers who do not love Netflix's streaming-first instincts.

'WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion.'

'We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.'

- David Ellison, chairman and CEO of Paramount

Warner Bros. Discovery is not slamming the door, but it is also not budging off Netflix. The company says it will 'carefully review and consider Paramount Skydance's offer in accordance with the terms of Warner Bros. Discovery's agreement with Netflix' (via Deadline). The board added that it is not changing its recommendation in favor of the Netflix deal and will respond to Paramount within 10 business days.

Netflix, for its part, is shrugging like this was inevitable. CEO Ted Sarandos called Paramount's move 'entirely expected' and said the streamer is confident its deal will close.

'We have a deal done, and we are incredibly happy with the deal. It is great for shareholders, great for consumers. We think it is a great way to create and protect jobs in the entertainment industry. We are super confident we are going to get it across the line. So we are set.'

- Ted Sarandos, Netflix CEO (via Deadline)

If the mechanics of this feel a little wonky, that is because they are. Usually, buyers court a board. Paramount says the WBD board did not engage, so it is appealing directly to shareholders with more cash now, fewer moving parts later, and a nod to theaters to win over creatives. Netflix counters with certainty and speed, plus the argument that its agreement is already in place.

• The bids: Paramount at about $100.7 billion, all cash; Netflix at $82.7 billion
• The gap: roughly $18 billion more from Paramount
• The pitch: Paramount touts theatrical windows and a quicker, cleaner close; criticizes cash-plus-stock structures and regulatory risk tied to linear cable assets
• WBD's stance: will review Paramount's offer under its Netflix agreement; not changing its recommendation; response due within 10 business days
• Netflix's read: expected challenge, still confident its deal crosses the finish line

Bottom line: it is a high-stakes stare-down. Shareholders now have a fatter check to consider, the board is signaling loyalty to the Netflix agreement, and the next 10 business days just became very interesting for anyone who cares about where some of Hollywood's biggest franchises end up calling home.