In a significant development in the ongoing consolidation drama within the media industry, Warner Bros. Discovery has agreed to enter limited negotiations with Paramount Skydance following indications that the latter is prepared to increase its longstanding takeover proposal. The move comes amid Warner Bros. Discovery’s continued commitment to its existing merger agreement with Netflix, which involves the sale of its studios and streaming assets while spinning off its linear television operations into a separate entity.
On February 17, 2026, Warner Bros. Discovery’s board announced a seven-day window for discussions with Paramount Skydance, set to conclude on February 23. This limited engagement follows verbal assurances from a senior representative of Paramount’s financial advisor on February 11 that the company would raise its all-cash offer to at least $31 per share if the two parties began talks, with the understanding that this figure would not represent the final proposal. The board emphasized its intent to seek clarity on Paramount’s best and final terms during this brief period.
“Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders,” said David Zaslav, President and Chief Executive Officer of Warner Bros. Discovery. “Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer.”
Paramount Skydance, led by David Ellison, has pursued Warner Bros. Discovery aggressively for months through a hostile tender offer valued at $30 per share in cash, which would encompass the entire company including its cable networks, film studios, and streaming platform. This approach contrasts sharply with the Netflix arrangement, under which Netflix would acquire Warner Bros. Discovery’s streaming business and studios for up to $27.75 per share in all-cash consideration, with the remaining linear assets, such as CNN and various cable channels, becoming an independent public company named Discovery Global.
The Netflix deal, recently restructured to an all-cash basis from a previous cash-and-stock mix, has received a limited waiver from Netflix allowing Warner Bros. Discovery to explore these talks without immediate breach, though the waiver expires on February 23. Netflix maintains matching rights, meaning it could counter any superior proposal from Paramount to preserve its position. A special shareholder meeting to vote on the Netflix transaction remains scheduled for March 20, with the Warner Bros. Discovery board unanimously recommending approval of that deal.
Paramount’s pursuit has involved multiple amendments to its offer, including a recent enhancement featuring a ticking fee of $0.25 per share for each quarter the transaction remains unclosed beyond December 31, 2026, equating to roughly $650 million in additional value per quarter. This provision highlights Paramount’s confidence in securing regulatory approval more swiftly than the Netflix path. The company has also committed to covering a substantial termination fee owed to Netflix in the event its bid prevails and has secured extensive debt financing alongside equity backing from prominent investors, including sovereign wealth funds and family trusts.
The competitive bidding landscape reflects broader pressures facing legacy media companies, including declining linear television revenues, the high costs of content production, and the need to scale streaming operations in a crowded market. Warner Bros. Discovery has repeatedly described the Paramount bid as carrying greater regulatory risk due to its structure and debt load, while positioning the Netflix transaction as offering superior certainty and value for shareholders focused on the core entertainment assets.
As the deadline approaches, attention turns to whether Paramount will deliver a compelling escalation that satisfies fiduciary obligations and shareholder interests, or if the current Netflix framework will proceed unchallenged toward its shareholder vote. The resolution will likely influence the competitive dynamics of streaming, theatrical distribution, and content creation for years to come in an industry undergoing rapid transformation.
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