Paramount Skydance Pledges $650M Quarterly to Warner Bros. if WBD Deal Delays
As the competitive landscape of the media industry intensifies, Paramount Skydance is making significant financial commitments in its bid for Warner Bros. Discovery (WBD). To strengthen its acquisition attempt, Paramount announced an additional cash consideration aimed at WBD shareholders.
Paramount’s Enhanced Offer Details
On Tuesday, Paramount revealed plans to offer an incremental cash payment of $0.25 per share. This amounts to a total value of approximately $650 million each quarter if the acquisition does not finalize by December 31, 2026.
Strategic Impacts on Warner Bros. Discovery
The additional payments reflect confidence that Paramount’s deal will navigate regulatory hurdles with greater ease than Netflix’s proposed merger with Warner Bros. Discovery.
Paramount has criticized the Netflix proposal, arguing it would result in a monopolistic control over subscription streaming services. Netflix, however, contends its market share would remain at around 10%, still trailing behind platforms like YouTube.
Financial Commitment to Shareholders
- Paramount has proposed to cover a $2.8 billion breakup fee owed to Netflix if shareholders accept the $30 per share buyout offer.
- Additionally, WBD’s potential $1.5 billion financing cost related to its debt exchange will be eliminated by a full backstop from Paramount.
- In case of regulatory blockages, Paramount promises to fully reimburse WBD shareholders for the $1.5 billion fee while maintaining the reverse-termination fee.
Paramount has also extended the expiration of its tender offer to March 2, 2026. WBD is expected to convene a special shareholder meeting in late March or early April to discuss the Netflix deal.
Ongoing Negotiations and Board Considerations
Despite the new terms from Paramount, Warner Bros. Discovery’s board remains focused on endorsing the existing Netflix deal, valued at $27.75 per share. Paramount’s chairman and CEO, David Ellison, emphasized the added value of their offer, which is designed to ensure shareholder returns and regulatory clarity.
Financing and Support Details
Paramount’s acquisition plan, estimated at an enterprise value of around $108 billion, is fully financed through commitments from notable investors, including:
- Larry Ellison and RedBird Capital Partners with $43.6 billion in equity commitments.
- Debt agreements totaling $54 billion from financial institutions like Bank of America and Citigroup.
- Support from sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi.
Ellison has also provided a personal guarantee covering equity financing and potential damages claims related to the acquisition.
Implications of Discovery Global Spin-Off
Warner Bros. Discovery plans to spin off Discovery Global by the third quarter of 2026, encompassing several major broadcast assets. Paramount predicts that this transition will impact WBD’s financial landscape, suggesting a reduced cash consideration of $23.20 per share under the Netflix deal.
Paramount argues that if Discovery Global accumulates a significant debt load, it would harm WBD shareholders, highlighting the advantages of choosing its superior cash offer of $30 per share.
Regulatory Approvals and Compliance Status
Paramount reported progress in securing regulatory approvals necessary for its acquisition. On February 9, 2026, the company confirmed compliance with the Department of Justice’s information requests. Additionally, clearance from German foreign investment authorities was achieved on January 27, 2026.
As Paramount Skydance presses forward, the company remains poised to reshape the media acquisition landscape amid ongoing developments with Warner Bros. Discovery.
