The battle for the “Harry Potter” and “Game of Thrones” libraries just went nuclear.
Sources report that Netflix (NFLX) is preparing to revise its $82.7 billion offer for Warner Bros Discovery’s (WBD) studio and streaming assets to all-cash, aiming to expedite the sale and eliminate the execution risk associated with its previous cash-and-stock bid.
🥊 THE TALE OF TWO BIDS: Shareholders face a stark choice between two different visions for the future of Hollywood:
- The Netflix Bid: Targets only the crown jewels (Studios + Streaming). Originally $82.7B ($27.75/share). Now moving to all-cash to secure the deal.
- The Paramount Skydance Bid: Targets the entire company (including legacy Cable TV). Offers $108.4B ($30/share) in cash, backed by Larry Ellison.
⚖️ THE BOARDROOM DRAMA:
- WBD’s Stance: The board has favored Netflix, arguing that Paramount’s higher offer is laden with debt financing risks and “remains inadequate.”
- Paramount’s Counter: Paramount has sued WBD for transparency, claiming their $30/share WholeCo bid is clearly superior and cleaner for regulators. They plan to nominate hostile directors to force the issue.
🛡️ THE BREAK FEES: The stakes are incredibly high.
- If Netflix fails regulatory approval: It pays WBD $5.8 billion.
- If WBD walks away for Paramount: It pays Netflix $2.8 billion.
💡 ANALYST TAKEAWAY: Netflix’s pivot to all-cash is a “flex” of its balance sheet power. By removing the stock component, they are trying to strip Paramount of its main argument—that the Netflix deal is uncertain. However, the regulatory optics of the world’s largest streamer buying the world’s most valuable IP library (DC, Friends, GOT) will likely trigger an antitrust firestorm in Washington, regardless of the payment method.
👇 Media Dealmakers: Should WBD take the lower “Sure Thing” from Netflix, or hold out for the higher “WholeCo” exit from Paramount?