Paramount Skydance is ramping up its bid for Warner Bros Discovery by offering extra cash for each quarter the deal fails to close after this year.
The CBS parent company also said that it would cover the $2.8bn termination fee if Warner Bros Discovery walks away from its $82.7bn deal for its studio and streaming assets with Netflix.
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The move is the latest effort by Paramount to sweeten the deal for the HBO parent company amid repeated attempts at a hostile takeover, which Warner Bros has turned down.
Paramount Skydance offered a 25-cent per share “ticking fee” which would ultimately come out to $650m in cash per quarter between the start of 2027 and the closing of the deal. However, the move does not raise its offer of $30 per share, or $108.4bn including debt, for the whole of Warner Bros including cable assets.
Both Netflix and Paramount covet Warner Bros for its leading film and television studios, extensive content library and major franchises such as Game of Thrones, Harry Potter and DC Comics’ superheroes Batman and Superman.
“The sweetened deal is unlikely to sway WBD away from Netflix and toward Paramount. Paramount is throwing spaghetti at the wall and hoping something sticks,” Ross Benes, senior analyst at Emarketer, told the Reuters news agency. “Outside of raising its price, Paramount’s best chance at stealing WBD is from outside regulators blocking Netflix.”
Conflict of interest concerns loom
Paramount leadership’s ties with the administration of United States President Donald Trump have long raised conflict-of-interest concerns. Paramount is led by the Ellison family, and Oracle co-founder Larry Ellison is a key Trump ally.
Paramount raised a personal guarantee from Ellison to $43.3bn and expects to fund the deal with $54bn of debt from Bank of America, Citigroup and Apollo.
The future of CNN is in the spotlight as part of the deal. Netflix has voiced little interest in the cable news channel, which the US president has long criticised. But Paramount has expressed a different opinion.
The Wall Street Journal reported late last year that Paramount Skydance CEO David Ellison, Larry Ellison’s son, promised Trump “sweeping changes” to CNN if his company was ultimately successful in the acquisition of Warner Bros Discovery.
Paramount has already reshaped CBS after Skydance’s acquisition of the storied broadcaster, including hiring Bari Weiss, a conservative opinion writer with no previous television experience, to lead one of the US’s largest news organisations.
Press freedom experts argue that the acquisition could hurt Warner Bros in the long term.
“WBD shareholders should push back against any transaction that would result in CNN being controlled by people who have already shown willingness to sell out journalism and journalists to benefit their other interests,” Seth Stern, director of advocacy at the Freedom of the Press Foundation, told Al Jazeera. “And that’s not to mention WBD’s other holdings, which also rely on a strong First Amendment. What happens when Donald Trump objects to the content of an HBO show? Authoritarianism isn’t just bad for democracy; it’s bad for business.”
While Democrats, including US Senators Bernie Sanders and Elizabeth Warren, have voiced concern about political bias in the Paramount Skydance deal, Republicans allege that Netflix is being politically biased.
Last week, Netflix co-CEO Ted Sarandos appeared at the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights and faced questions about alleged political bias from Republicans.
“Netflix has no political agenda of any kind,” Sarandos said.
Republicans have often treated transgender identity as a political position, labelling it an ideology. At the hearing, US Senator Josh Hawley of Missouri pressed the platform on why it allowed content he claimed “promotes a transgender ideology”.
“We feature a wide variety of stories and programmes to meet a wide variety of people’s tastes,” Sarandos said.
If Netflix were to succeed in the merger fight, it would become the world’s largest streaming platform, with roughly half a billion subscribers.
Financial questions
Paramount offered other measures that would address financial concerns posed by the Warner Bros board, including a backstop debt exchange that Paramount argues will eliminate the risk of a $1.5bn fee owed to the bondholders.
The company also said it certified compliance with the US Department of Justice’s second request on Monday, triggering a 10-day waiting period, and has already secured foreign investment clearance in Germany. It added that it is in talks with antitrust regulators in the US, the European Union and the United Kingdom.
“Paramount’s latest offer attempts to address regulatory concerns about successfully closing a deal, but both bids from Netflix and Paramount Skydance could face lengthy, contentious regulatory reviews in the US and internationally with no guarantee of a successful outcome,” Seth Shafer, principal analyst at S&P Global, told Reuters.
The company also yet again extended the deadline for Warner Bros Discovery to consider its offer by February 20. Warner Bros will hold a special investor meeting to vote on the Netflix deal, with the streaming pioneer saying that the meeting was expected to be held by April.
Netflix had last month switched to an all-cash offer for Warner Bros without increasing its $82.7bn price. The Warner Bros board has said the Netflix merger deal is superior to Paramount’s bid because its investors would retain a stake in the separately traded Discovery Global.
On Wall Street, Warner Bros Discovery’s stock is up 2.1 percent since the market opened on Tuesday. Paramount also ticked up in midday trading by 1.3 percent. Netflix is also up by about 2.4 percent.
