Paramount Skydance Corp (NASDAQ:PSKY) has upended expectations in its battle with Netflix for control of Warner Bros Discovery Inc (NASDAQ:WBD), shifting from apparent underdog to serious front-runner.
The reason is simple: David Ellison has put forward a higher, cleaner and now fully financed offer that is resonating with shareholders increasingly uneasy about Netflix’s bid.
Ellison’s $30-a-share all-cash proposal values WBD at about $108 billion, including debt, far above Netflix’s agreed $27.75-a-share cash-and-stock deal for only part of the business.
Institutional investors tend to prize certainty, and Paramount’s straight cash offer compares favourably with the prospect of receiving Netflix shares that could fluctuate during what many expect to be a lengthy regulatory review.
Paramount has the dough
Paramount has also clarified its financing. Tens of billions in committed bank debt, alongside equity from the Ellison family, Affinity Partners and Gulf sovereign wealth funds, have reduced doubts that previously allowed WBD’s board to dismiss earlier approaches.
At the same time, the market has cooled on Netflix’s proposal: its shares have fallen as analysts question the logic and regulatory risk of buying a major rival, while WBD and Paramount have risen.
Because the Paramount bid is structured as a tender offer directly to shareholders, momentum matters.
If a large proportion of WBD investors tender at $30, the board may struggle to defend its backing for Netflix, even when factoring in break fees. Directors are required to maximise value, and ignoring a clearly higher proposal risks legal challenge. Paramount’s pitch also taps into broader concerns.
Netflix concerns
Regulators, politicians and unions have already raised alarms about Netflix absorbing a major competitor, while President Trump has signalled interest in scrutinising the deal. Paramount argues its offer preserves competition by keeping Netflix independent and strengthening a rival capable of standing up to Disney and Amazon.
Still, the contest is not over. Paramount’s financing partners, including political figures and foreign funds, could draw scrutiny. Some WBD investors may prefer Netflix stock for its streaming exposure. Others may worry about Paramount’s long-term governance or the combined group’s debt load. And if market conditions turn, the banks underwriting the bid could push to revisit terms.
Hollywood's take
Inside Hollywood, the choice reflects two starkly different futures. A Netflix-owned Warner would prioritise subscriber-centric decisions, with data-driven commissioning and global platform economics shaping the studio’s output. A Paramount–Warner combination would emphasise theatrical releases, franchise building and a traditional studio model, albeit with inevitable cost-cutting.
For now, though, the momentum is with Ellison. Paramount has more money on the table, clearer financing and a political and regulatory climate tilting against Netflix. If shareholders continue to move in Paramount’s direction, the board will struggle to hold the line.