Paramount Skydance to Buy Warner Bros. Discovery in $110 Billion Deal, Outbidding Netflix

Paramount Skydance has agreed to buy Warner Bros. Discovery in a $110 billion deal that would fuse two of Hollywood’s most storied studios, combine CNN and CBS News under one corporate roof and create a new heavyweight in the global streaming wars, pending shareholder and regulatory approval.

The all-cash transaction, announced Feb. 27 in a joint statement from Los Angeles and New York, caps a months-long bidding battle with Netflix and sets up one of the biggest antitrust tests yet for the modern media industry.

Under the agreement, Paramount Skydance will acquire 100% of Warner Bros. Discovery, paying shareholders $31 per share in cash. If the deal has not closed by Sept. 30, 2026, WBD investors will begin earning an additional “ticking fee” of 25 cents per share per quarter, accruing daily until closing. The agreement values Warner Bros. Discovery at about $81 billion in equity and roughly $110 billion in enterprise value, including debt.

The boards of both companies voted unanimously to approve the deal, which Paramount says it expects to close in the third quarter of 2026. It still must win a shareholder vote at Warner Bros. Discovery and clear antitrust reviews in the United States, Europe and several other major markets.

In their joint news release, the companies cast the merger as the creation of a “next-generation global media and entertainment company” able to compete more effectively with Netflix, Disney, Amazon and Apple across streaming, theatrical films, television, sports and news.

“Our vision is to honor the legacy of these iconic brands while building a premier global media and entertainment company for the streaming age,” Paramount Skydance Chairman and CEO David Ellison said.

A high-priced victory over Netflix

The agreement represents a victory for Paramount in a high-stakes contest with Netflix, which in December had reached its own deal to buy Warner Bros. Discovery’s studios and streaming businesses.

Under that earlier plan, Netflix would have acquired HBO, Warner Bros. studio and the Max streaming service in a complex transaction valued at $27.75 per WBD share, while the company’s cable channels would be spun off into a separate, highly indebted entity called Discovery Global. Warner Bros. Discovery’s board scheduled a March 20, 2026, shareholder meeting and recommended investors approve the Netflix deal.

Paramount disrupted that plan on Dec. 8, 2025, launching a hostile all-cash tender offer for all of Warner Bros. Discovery at $30 per share. The company argued its bid was simpler, richer and avoided leaving investors stuck with a struggling linear television business.

Warner’s board initially rejected Paramount’s approach and reaffirmed its support for Netflix, describing the rival offer as too risky and undervaluing the company.

Paramount kept pressing. By late February, it raised its bid to $31 a share and added several sweeteners: the ticking fee for delays past September, a $7 billion reverse termination fee if regulators block the merger, and a promise to cover the $2.8 billion breakup fee Warner Bros. Discovery would owe Netflix if it walked away.

On Feb. 26, Warner’s board concluded that the enhanced Paramount Skydance proposal “constitutes a ‘Company Superior Proposal’” under the terms of its agreement with Netflix, triggering a brief window for Netflix to raise its offer. The streaming giant declined to do so, saying it would not chase a higher price, and effectively walked away. Netflix will still receive the $2.8 billion termination payment funded by Paramount.

A definitive merger agreement between Paramount Skydance and Warner Bros. Discovery followed the next day.

Debt, “synergies” and an aggressive capital stack

To finance the takeover, Paramount plans to lean heavily on both new equity and new borrowing.

The company said it will issue about $47 billion of new Class B stock at $16.02 per share, fully subscribed by the Ellison family and private investment firm RedBird Capital Partners in a private placement-style transaction. Existing Paramount shareholders are expected to have the right to buy up to $3.25 billion of that stock at the same price in a rights offering closer to closing.

On the debt side, Bank of America, Citigroup and Apollo have committed $54 billion in new financing, including roughly $39 billion in fresh loans and bonds and $15 billion to refinance Warner Bros. Discovery’s existing bridge facility. A separate $3.5 billion bridge will backstop Paramount’s revolving credit line. The companies said the merger is not subject to a financing condition, a clause intended to reassure Warner’s board and shareholders that the cash will be available.

Paramount projects that the combined company will carry net debt equal to about 4.3 times its expected earnings before interest, taxes, depreciation and amortization, assuming a full $6 billion in annual cost savings and other “synergies” it says it can achieve. Management has said it sees a “clear path” to restoring investment-grade credit metrics within three years.

Those projected synergies come largely from consolidating technology platforms, back-office functions, overlapping marketing and distribution operations, and some content spending.

A content and distribution heavyweight

If completed, the merger would create one of the largest media and entertainment conglomerates in the world.

On the film and television side, the combined portfolio would include Warner’s Harry Potter, Game of Thrones and DC Comics universes, as well as The Lord of the Rings rights, HBO’s prestige catalog, Friends and the Discovery factual brands. From Paramount come Mission: Impossible, Top Gun, Transformers, Star Trek, Teenage Mutant Ninja Turtles, SpongeBob SquarePants and the Yellowstone television universe, among others. The companies say the merged library would encompass more than 15,000 films and thousands of television episodes.

Paramount has pledged to maintain both Warner Bros. and Paramount Pictures as separate creative engines and to release at least 30 theatrical films a year — roughly 15 per studio — with each title receiving a global theatrical window of at least 45 days before moving to premium on-demand or streaming. Many films, executives said, would have 60- to 90-day runs.

In streaming, Paramount plans to bring together Paramount+, HBO Max and its free, ad-supported Pluto TV service into an integrated direct-to-consumer offering, though it has not detailed whether that will mean a single app, bundled tiers or both. The company argues that the enlarged platform will give consumers broader choices and advertisers more reach.

The merger would also knit together a sprawling cable and broadcast footprint. Warner’s HBO, TNT, TBS, CNN, Discovery, HGTV, Food Network and TLC would sit alongside Paramount’s CBS broadcast network, MTV, Comedy Central, Nickelodeon, Showtime and BET, among others. Internationally, the combined company would operate channels and production hubs in more than 200 countries and territories.

Sports and news would be central pillars. The two firms hold rights to the National Football League, Olympics, UFC, the NHL, the PGA Tour, the UEFA Champions League, and major college football and basketball properties. CNN would become a corporate sibling to CBS News and other Paramount news operations, an alignment that has already drawn political attention.

Antitrust scrutiny and political pushback

The deal will undergo review under the Hart-Scott-Rodino Antitrust Improvements Act by either the Department of Justice or the Federal Trade Commission. Paramount has said the initial HSR waiting period has expired, but that does not amount to final clearance; regulators can still open an in-depth investigation, seek concessions or file suit to block the deal.

California Attorney General Rob Bonta has already opened his own antitrust investigation, emphasizing that the merger “has not cleared regulatory scrutiny” and is “not a done deal.” Bonta has warned that further consolidation in media “can drive higher prices, reduce choices and cost California workers their jobs,” pointing to the companies’ $6 billion synergy target and job losses that followed both the 2022 WarnerMedia–Discovery merger and Paramount’s earlier combination with Skydance.

On Capitol Hill, progressive Democrats have emerged as some of the loudest critics.

Sen. Elizabeth Warren of Massachusetts called the takeover an “antitrust disaster” that she said would mean “higher prices and fewer choices for American families.” In a statement, she argued that “Trump-aligned billionaires should not be allowed to grab even more control over what Americans watch under a cloud of corruption at Donald Trump’s Department of Justice,” referring to some of Paramount’s financiers and to questions about political influence on antitrust enforcement. Her statement did not provide evidence that any specific intervention had taken place.

Sen. Cory Booker of New Jersey, the top Democrat on the Senate Judiciary subcommittee that oversees antitrust, said in his own statement that “the proposed merger between Paramount and Warner Bros. Discovery is far from settled.” He said Congress “has a responsibility to closely scrutinize deals that threaten competition and concentrate media power,” and signaled that an already scheduled March 4 hearing would examine the transaction.

Labor unions are also lining up against the merger. The Writers Guild of America has urged senators to oppose the deal, citing what it called “devastating” layoffs and more than $2 billion in content cuts after the WarnerMedia–Discovery tie-up four years ago and more than 1,000 job losses following the Paramount–Skydance merger. The guild said the new $6 billion synergy goal “can only be achieved through massive job cuts, reduced investment in programming and further consolidation of creative decision-making.”

High-profile actors and creators, including Mark Ruffalo, have criticized the move publicly, arguing that another round of consolidation will narrow the kinds of stories that get financed and weaken bargaining power for writers, actors and below-the-line workers.

What’s next for the deal — and for viewers

Before Paramount can close the acquisition, Warner Bros. Discovery shareholders must vote on the merger agreement this spring and formally terminate the earlier Netflix transaction, triggering payment of the $2.8 billion breakup fee.

U.S. regulators must decide whether to allow the deal as proposed, seek remedies such as divestitures in news or sports, or move to block it outright in court. State attorneys general, led by California, could negotiate their own conditions or sue independently. Competition authorities in the European Union, United Kingdom, China, Japan, South Korea, Australia, Canada, Brazil and India are also expected to review the transaction.

For viewers, the outcome could reshape how entertainment, sports and news reach their screens. A combined Paramount–Warner Bros. Discovery could eventually offer fewer streaming apps and more bundled content. It could also gain more leverage to raise subscription prices, increase advertising loads or tie premium content to larger packages, depending on how regulators respond.

Whether the merger proceeds, and on what terms, will help determine how much power a single company can wield over many of the world’s most recognizable franchises and some of its most-watched news outlets at a time when both the media business and public trust in it are under pressure.