Warner Bros Discovery’s board has unanimously rejected Paramount Skydance’s latest attempt to acquire the studio, calling the $108.4 billion offer a risky deal that would saddle the company with enormous debt. In a letter to shareholders on Wednesday, Warner Bros said Paramount’s bid relied on “an extraordinary amount of debt financing,” raising doubts about its ability to close. The board reaffirmed its commitment to Netflix’s $82.7 billion offer for the studio and related assets.
Paramount and Netflix have been competing for control of Warner Bros, which owns some of Hollywood’s most valuable franchises, including “Harry Potter,” “Game of Thrones,” “Friends,” and the DC Comics universe. Its library also includes classic films such as “Casablanca” and “Citizen Kane.”
According to Warner Bros, Paramount’s plan would burden the smaller studio with $87 billion in debt if the deal were completed, creating the largest leveraged buyout in history. The board voted against the $30-per-share cash offer on Tuesday and detailed its concerns in a 67-page amended merger filing.
The filing said the offer “remains inadequate” due to uncertainty over Paramount’s ability to complete the deal and the potential costs and risks for Warner Bros shareholders if the acquisition fails. Paramount, valued at about $14 billion, proposed using $40 billion in equity guaranteed by Oracle co-founder Larry Ellison and $54 billion in debt to fund the purchase. Warner Bros noted that such a structure could strain Paramount’s cash flow and worsen its already junk-rated credit status.
Netflix, by contrast, has a market value of around $400 billion and an investment-grade credit rating. Its $27.75-per-share cash and stock offer is considered more financially secure and easier to execute. Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the decision, saying it recognized their deal as “the superior proposal” for shareholders, creators, and the wider entertainment industry.
Warner Bros shares slipped 0.5% to $28.30 in premarket trading. Netflix edged up slightly, while Paramount remained mostly unchanged.
The board highlighted additional costs that would come from abandoning the Netflix deal, including a $2.8 billion termination fee to the streaming company, $1.5 billion in lender fees, and $350 million in financing costs. Paramount’s offer also included operating restrictions that could hinder Warner Bros’ planned spin-off of cable networks into a separate public company, Discovery Global.
Analysts say the battle for Warner Bros has become one of Hollywood’s most closely watched takeover contests, as studios look to scale up amid intense streaming competition and uncertain box office revenue. While Paramount’s bid is higher on paper, Netflix’s proposal is seen as more achievable with less execution risk.
Some experts expect Paramount to make further attempts. Lawmakers from both parties and President Donald Trump have raised concerns about media consolidation, adding another layer of scrutiny to the high-stakes acquisition battle.
