By Isnaini Azizah 
The battle for control of Warner Bros. Discovery—the home of HBO, CNN, the DC Universe, and the historic Warner Bros. film studio—has entered an aggressive new phase. Currently, WBD is under a pending merger agreement with Netflix, a deal primarily focused on WBD’s streaming and studio assets. That deal, valued at approximately $27.75 per share in an all-cash transaction, was initially viewed as the safest path forward for a company still grappling with a heavy debt load inherited from the 2022 merger of Discovery and WarnerMedia. However, the landscape shifted dramatically when Paramount Skydance, led by David Ellison and backed by a consortium of high-profile investors, launched a hostile tender offer directly to WBD shareholders at $30 per share. This bypass of the board was a clear signal that Paramount Skydance was willing to fight for the assets at any cost, leading to the current state of corporate deadlock.
According to the official release from Warner Bros. Discovery, the board’s decision to engage with Paramount Skydance during this one-week window is intended to provide "clarity" for stockholders who have been caught between the competing bids. While the WBD board continues to unanimously recommend the Netflix merger, the emergence of a potential $31 per share offer from Paramount—communicated via a senior representative to a WBD board member—was too significant to ignore. WBD CEO David Zaslav emphasized that the company’s "sole focus" remains on maximizing shareholder value and ensuring the "certainty" of the transaction. Zaslav’s rhetoric highlights the central tension of the negotiations: while the Paramount bid offers a higher nominal price per share, the Netflix deal is viewed by many as having a higher probability of closing without protracted legal or regulatory delays.
Netflix’s decision to grant the waiver is a strategic gamble. By allowing WBD to speak with its rival, Netflix co-CEO Ted Sarandos is effectively calling Paramount’s bluff. In an interview with CNBC’s Julia Boorstin, Sarandos characterized Paramount’s tactics as "flooding the zone with confusion" and "PSKY’s antics." Sarandos argued that by granting the seven-day window, Netflix is allowing the market to see whether Paramount’s hypothetical offers can actually be translated into a binding, actionable contract. "We’ve given the opportunity to get those shareholders exactly what they deserve, which is complete clarity and certainty," Sarandos said. He notably declined to state whether Netflix would exercise its "matching rights"—a contractual clause that allows Netflix to match any superior offer from a third party—leaving the door open for a potential counter-bid should Paramount Skydance raise the stakes beyond $31.
The financial implications of this showdown are immense. Warner Bros. Discovery has been a centerpiece of industry consolidation talk for years, particularly as the "Streaming Wars" have shifted from a period of unbridled spending to one of cost-cutting and a search for profitability. WBD’s massive library of intellectual property is a crown jewel that would instantly elevate Netflix from a tech-first distributor to a traditional studio powerhouse, or conversely, transform the newly merged Paramount Skydance into a diversified media conglomerate capable of rivaling Disney. Shares of WBD rose nearly 3% on Tuesday following the announcement, while Paramount shares gained 5%, reflecting investor optimism that a bidding war will drive the final price higher.
However, the path to a completed deal is fraught with regulatory landmines, regardless of who wins. A Netflix acquisition of WBD’s studio and streaming assets would unite two of the world’s most popular streaming services, Max and Netflix. This has already raised red flags among antitrust advocates and lawmakers who worry that such a consolidation would lead to reduced competition, fewer choices for creators, and inevitable price hikes for consumers. Netflix has countered these concerns by positioning itself as a "savior" of the industry, arguing that its capital and global reach would preserve jobs and provide a stable home for legacy assets in a market currently plagued by layoffs and shrinking linear television revenues.
On the other side, the Paramount Skydance bid faces its own set of unique hurdles. The consortium’s reliance on foreign funding has become a lightning rod for criticism. The deal is partially financed by sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar. While Paramount has stated that these entities will remain passive investors with no governance rights, the deal is almost certain to face a rigorous review by the Committee on Foreign Investment in the United States (CFIUS). Netflix has been quick to point out these vulnerabilities, suggesting that the "national security picture" of its own bid is far cleaner. Furthermore, European regulators, known for their aggressive stance on big tech and media mergers, are expected to scrutinize the Middle Eastern investment heavily, potentially leading to a years-long approval process that WBD’s debt-laden balance sheet might not be able to endure.
The political dimension adds another layer of unpredictability. With the transaction likely to close during the administration of President Donald Trump, both camps have been jockeying for favor. While Trump recently stated he had not yet involved himself in the process, reports indicate he has met with executives from both sides. Historically, Trump has expressed a complicated relationship with media companies, famously opposing the original AT&T-Time Warner merger during his first term. Industry analysts are divided on how the Department of Justice might view either deal under the current political climate, though Sarandos was adamant that Paramount does not have an "inside track" with federal regulators.
As the seven-day clock ticks toward the February 23 deadline, the industry is bracing for Paramount’s "best and final" offer. For David Ellison and Skydance, this is a defining moment. If they can produce a binding agreement that addresses WBD’s concerns regarding regulatory certainty and financial backing, they may successfully peel the company away from Netflix. If they fail to provide a proposal that is demonstrably "superior" in both value and the likelihood of closing, the WBD board is expected to proceed with the Netflix transaction as planned.
The stakes for the broader entertainment ecosystem cannot be overstated. The outcome of this battle will dictate the future of content distribution for the next decade. A Netflix victory would cement the dominance of the Silicon Valley model, potentially marking the end of the traditional "Big Five" studio era as we know it. A Paramount Skydance victory would represent a bold attempt to revive the legacy studio model through a massive infusion of private and international capital, creating a new "super-major" capable of competing on both the big screen and the small screen.
Warner Bros. Discovery has scheduled a special meeting of shareholders for March 20, 2026, to vote on the Netflix merger. This date serves as a "hard stop" for the current negotiations. Between now and then, every document, every funding source, and every regulatory projection will be scrutinized by teams of lawyers and bankers on three continents. For now, the ball is firmly in Paramount Skydance’s court. The company must move beyond "making noise" and "flooding the zone" to present a legally airtight, financially superior bid that can withstand the scrutiny of a skeptical board and a watchful government. As the media world watches, the seven-day waiver may well be remembered as the week that decided the fate of the storied Warner Bros. legacy.