In a significant shift in the media and entertainment sector, Warner Bros. Discovery, Inc. (NASDAQ: WBD) announced on February 26, 2026, that its Board of Directors has determined that a revised proposal from Paramount Skydance Corporation (NASDAQ: PSKY) qualifies as a "Company Superior Proposal." This decision comes after consulting with independent financial and legal advisors, marking a pivotal moment in WBD's ongoing engagement with Netflix, Inc. (NASDAQ: NFLX).

2. The Details of the PSKY Proposal

The proposal from PSKY outlines a purchase price of $31.00 per WBD share in cash. Additionally, it includes a daily ticking fee of $0.25 per share per quarter, which would commence after September 30, 2026. Notably, PSKY has offered a robust $7 billion regulatory termination fee should the transaction not close due to regulatory hurdles. PSKY's commitment also extends to covering a $2.8 billion termination fee that WBD would incur to exit its existing merger agreement with Netflix.

Furthermore, the proposal stipulates that Larry J. Ellison and an associated trust will provide additional equity funding as needed to support the solvency certificate required by PSKY's lending banks. Importantly, the definition of "Company Material Adverse Effect" in the proposal excludes the performance of WBD's Global Linear Networks segment, adding a layer of protection for WBD's existing operations.

3. Implications for the Netflix Merger Agreement

WBD has formally notified Netflix that the PSKY proposal constitutes a "Company Superior Proposal," triggering a four-business-day period during which Netflix has the opportunity to propose revisions to its merger agreement with WBD. If, after this period, the WBD Board, in good faith and after consulting with its advisors, determines that the PSKY proposal remains superior, the company would be entitled to terminate the Netflix merger agreement.

Despite these developments, WBD's Board continues to recommend moving forward with the Netflix transaction and has not retracted or altered its endorsement.

4. Advisory Support

To navigate this complex situation, WBD has engaged multiple financial advisors, including Allen & Company, J.P. Morgan, and Evercore. Legal support is being provided by Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP, ensuring that WBD is well-prepared to address the intricacies of these negotiations.

5. About Warner Bros. Discovery

Warner Bros. Discovery stands as a frontrunner in the global media and entertainment landscape, producing and distributing a diverse portfolio of branded content across television, film, streaming, and gaming. The company captivates audiences worldwide through its renowned brands, including HBO Max, CNN, and Discovery Channel, among others.

6. Conclusion

The developments surrounding Warner Bros. Discovery and Paramount Skydance's proposal underscore the fluid dynamics of the media and entertainment industry, characterized by strategic mergers and acquisitions. Investors and analysts will be closely monitoring the next steps in this unfolding narrative, particularly how Netflix responds to PSKY's compelling offer and what it means for the future of WBD.

As the situation evolves, stakeholders can expect further updates from WBD, alongside detailed communications regarding the tender offer and any potential modifications to existing agreements.

Original press release