Acquisition Battle Intensifies for Media Giant Warner Bros. Discovery

Paramount Skydance ups bid to $31/share for Warner Bros. Discovery, challenging Netflix's offer. The media giant's Q4 earnings and regulatory scrutiny add to the high-stakes takeover drama.

The corporate future of Warner Bros. Discovery (A) is at the center of a fierce bidding war, marking one of the media industry's most closely watched takeover contests. As the company prepares to release its latest quarterly earnings, two major suitors—Netflix and a consortium of Paramount and Skydance—are escalating their efforts to acquire the entertainment conglomerate.

Revised Bid Alters the Landscape

A significant development emerged on February 24th, when the Warner Bros. Discovery board of directors acknowledged that a revised proposal from Paramount Skydance could "reasonably be expected to lead to a superior proposal." The consortium's latest offer stands at $31 per share in cash, representing a one-dollar increase from its previous bid.

The terms are notably complex. The proposal includes a quarterly fee of $0.25 commencing in October 2026, alongside a substantial $7 billion regulatory break-up fee, payable if antitrust authorities block the transaction. Furthermore, Paramount Skydance would assume the $2.8 billion termination fee that Warner Bros. Discovery would owe Netflix to exit their existing merger agreement.

This contrasts sharply with Netflix's standing offer of $27.75 per share, which values only the studio and streaming divisions at approximately $82.7 billion. The Paramount Skydance bid targets the entire company, including its cable television assets, pushing the potential total enterprise value above $108 billion.

The board has stopped short of declaring the new offer definitively superior and continues to recommend the existing Netflix merger to shareholders. However, should the board's position change, Netflix would be granted a four-business-day window to submit an improved counteroffer.

Quarterly Earnings Under the Microscope

Amid this corporate maneuvering, Warner Bros. Discovery is scheduled to report its fourth-quarter 2025 financial results before the market opens today. Analyst consensus points to earnings of just $0.03 per share, a sharp decline from the $0.20 per share reported for the same period last year. Revenue expectations are set at around $9.38 billion, compared to $10.03 billion in the prior-year quarter.

Investor scrutiny will be particularly focused on the performance of the direct-to-consumer streaming segment. The platform reported a global subscriber base of 128 million at the end of Q3. Company management had previously indicated that crackdowns on account-sharing would yield measurable results in the fourth quarter. Additional relief was anticipated from approximately $100 million in savings on sports rights, following a reduced overlap with NBA programming.

Regulatory and Political Scrutiny Mounts

The high-stakes battle has attracted the attention of the U.S. Department of Justice, which is examining whether either proposed combination could harm market competition. Political dimensions have also surfaced, with former President Donald Trump publicly commenting on the Netflix proposal over the weekend. The sheer size of the $7 billion regulatory break-up fee included in the Paramount Skydance offer underscores the significant antitrust risks perceived by the bidders.

Shareholders of Warner Bros. Discovery are set to vote on the Netflix merger agreement on March 20th. In the intervening weeks, the contest between the two bidding parties is expected to grow increasingly intense. Today’s quarterly earnings release may provide fresh ammunition for both sides as they make their final cases to the company's board and its investors.