Warner Bros. Discovery Inc. is moving closer to formally opposing a hostile takeover attempt by Paramount Skydance Corp., as concerns grow within its board over financing reliability, deal certainty, and long-term operational flexibility. People familiar with internal discussions say the board is preparing to recommend that shareholders reject Paramount’s tender offer, reinforcing Warner Bros.’ commitment to its existing agreement with Netflix.
Although a final decision has not yet been announced, Warner Bros. could submit its official response to the takeover proposal as early as midweek. The situation remains fluid, and deliberations are ongoing. Both Warner Bros. Discovery and Paramount Skydance have declined to comment publicly as the process unfolds.
Netflix Deal Viewed as More Stable and Predictable
Central to Warner Bros.’ resistance is the belief among directors that the Netflix transaction offers clearer value and fewer execution risks than Paramount’s proposal. Earlier this month, Warner Bros. agreed to sell its studios, streaming operations, and HBO to Netflix at a price of $27.75 per share. The deal values the transaction at roughly $83 billion when debt is included and followed weeks of competition among major media players, including Paramount and Comcast.
As part of that arrangement, Warner Bros. plans to separate and distribute its cable television assets—such as CNN and TNT—to shareholders before finalizing the Netflix deal. Board members see this structure as a cleaner and more reliable path forward, particularly at a time when regulatory scrutiny of major media mergers is intensifying.
While Paramount’s offer comes in at a higher headline price of $30 per share—placing the overall value above $108 billion including debt—the Warner Bros. board remains unconvinced that the higher figure adequately compensates for added risks tied to financing and regulatory approval.
Financing Concerns Undermine Confidence in Paramount Offer
A major obstacle standing in the way of a potential deal is Warner Bros.’ unease over how Paramount plans to fund the acquisition. Paramount Skydance is led by David Ellison, with equity support tied to a trust overseeing the wealth of his father, Oracle founder Larry Ellison.
Because that trust can be altered or revoked, Warner Bros. directors worry the financial backing may not be as secure as it appears. If assets were removed from the trust after a deal was initiated, Warner Bros. could face limited options for recourse. These concerns have weighed heavily on board discussions, particularly as recent changes to Paramount’s investor lineup have added uncertainty.
Withdrawal of a Key Investor Raises New Questions
Those doubts intensified after one of Paramount’s financial backers withdrew from the proposed acquisition. Affinity Partners, an investment firm led by Jared Kushner, confirmed it had exited the deal earlier this week. The firm pointed to competitive dynamics surrounding the transaction as a factor behind its decision.
The withdrawal occurred against a backdrop of heightened political attention. President Donald Trump publicly criticized Paramount and its CBS division earlier in the day, linking his dissatisfaction to changes following the Ellison family’s assumption of control earlier this year. Given the scale of the transaction and the likelihood of regulatory review, the political environment has become an additional consideration for Warner Bros.’ leadership.
Regulatory Delays and Operational Limits Add Risk
Beyond financing, Warner Bros.’ board is focused on the operational challenges that could arise during a lengthy regulatory approval process. A full acquisition by Paramount would almost certainly require extensive review by U.S. regulators, a process that could stretch beyond a year.
During that time, Warner Bros. fears it would be constrained in its ability to manage its business effectively. Directors are concerned that Paramount’s proposal does not allow enough flexibility to refinance debt, make strategic investments, or respond to shifting market conditions while awaiting approval. In an industry already grappling with declining cable revenues and streaming pressures, prolonged uncertainty could weaken the company’s position.
Paramount Pushes Back, Says Issues Have Been Addressed
Paramount has pushed back on claims that its proposal leaves Warner Bros. boxed in. In a regulatory filing last week, the company said it had taken steps to resolve concerns about financial flexibility, including the ability to refinance debt during the approval process.
Paramount also stated it had addressed worries over a potential $5 billion breakup fee, noting that the payment would be supported by the Ellison family. The company has emphasized that it has adjusted terms multiple times in response to Warner Bros.’ feedback and remains open to further discussions.
Despite those assurances, Warner Bros.’ board remains cautious, viewing the changes as insufficient to offset broader concerns.
Deal Revisions Highlight Fragile Funding Environment
Paramount has already been forced to revise parts of its financing strategy. Around $1 billion in proposed funding from China’s Tencent Holdings was removed after concerns surfaced that the involvement of a Chinese investor could trigger national security scrutiny from U.S. regulators.
Although Warner Bros. reportedly agreed that removing Tencent reduced regulatory risk, the episode reinforced worries about the stability of Paramount’s financing package. For directors weighing long-term outcomes, the revisions have underscored the uncertainty surrounding the bid.
Shareholders Watch Closely as Stock Hovers Near Offer Price
After Warner Bros. and Netflix announced their agreement, Paramount took its bid directly to shareholders by launching a public tender offer. Paramount has indicated that its $30-per-share proposal is not necessarily final, leaving open the possibility of a higher bid.
Market activity suggests investors are divided. Warner Bros. shares recently closed at $28.90, just below Paramount’s offer price, signaling that some shareholders believe a sweeter deal could still materialize.
Under the Netflix agreement, Warner Bros. is barred from actively seeking alternative offers but is permitted to consider unsolicited proposals. If a superior offer emerges, the company is required to give Netflix the opportunity to match it before changing course.
