Netflix All-Cash Warner Bros Bid Counters Paramount’s $30 Offer
In a dramatic escalation of the battle for Warner Bros. Discovery (WBD), Netflix has revised its acquisition proposal to an all-cash deal—matching its original $27.75-per-share valuation but ditching stock in favor of guaranteed liquidity. The move, announced January 20, 2026, is a direct response to Paramount Skydance’s aggressive $30-per-share all-cash counteroffer, which has gained traction among WBD shareholders despite concerns over financing and debt load. With both streaming giants vying for control of Hollywood’s most storied studio, the stakes have never been higher.
Why Netflix Switched to an All-Cash Deal
Originally, Netflix’s agreement with WBD included a mix of cash and stock—a structure that offered long-term upside but introduced market volatility risk. Now, under pressure from Paramount’s cleaner, higher-priced bid, Netflix has streamlined its offer to eliminate uncertainty. The revised terms still value WBD at $82.7 billion, but the shift to 100% cash signals Netflix’s confidence in its balance sheet and urgency to close the deal quickly.
According to a joint statement, the new structure “provides greater certainty of value” and accelerates the shareholder vote timeline. Netflix plans to fund the transaction through a combination of existing cash reserves, new debt issuance, and committed financing from major financial institutions—though it hasn’t disclosed exact proportions. The pivot underscores a strategic recalibration: in today’s high-interest, risk-averse market, shareholders increasingly prefer hard currency over equity promises.
Paramount’s Aggressive Play—and Its Risks
Paramount Skydance, backed by Oracle co-founder Larry Ellison’s $40 billion personal guarantee, has positioned itself as the bold outsider willing to pay more upfront. Its $30-per-share offer represents a roughly 8% premium over Netflix’s valuation and targets the entire WBD entity—not just its film and streaming assets. That broader scope could unlock synergies across linear TV, sports rights, and international operations, but it comes with steep financial baggage.
Critics, including WBD’s current board, warn that Paramount’s plan would saddle the combined company with an estimated $87 billion in debt. With Paramount already carrying a “junk” credit rating and negative free cash flow, adding such leverage could cripple operational flexibility and delay much-needed content investment. In internal memos reviewed by industry analysts, WBD executives argue that Paramount’s model prioritizes short-term shareholder appeasement over long-term sustainability—a dangerous gamble in an era where streaming profitability hinges on disciplined spending.
Shareholder Tensions Rise as Vote Looms
The revised Netflix offer arrives amid growing unrest among WBD investors. While the board remains firmly aligned with Netflix, several large institutional shareholders have expressed openness to Paramount’s higher bid, especially now that it’s fully cash-based. The court’s recent rejection of Paramount’s request to fast-track its lawsuit—seeking more details on Netflix’s original deal—has only heightened tensions.
Paramount’s legal maneuver was part of a broader campaign to challenge WBD’s “exclusivity agreement” with Netflix, which bars the company from entertaining other offers without paying a substantial breakup fee. By nominating new directors to WBD’s board, Paramount aims to install allies who could force a reevaluation of the Netflix deal. So far, WBD has resisted, citing fiduciary duty and strategic alignment with Netflix’s global streaming dominance.
Strategic Implications: Who Really Wins?
Beyond price, the core question is strategic fit. Netflix brings scale, data-driven content development, and a global subscriber base of over 300 million. Integrating Warner Bros.’ iconic IP—Harry Potter, DC Comics, Lord of the Rings—could supercharge Netflix’s push into interactive storytelling, gaming, and live experiences. Crucially, Netflix doesn’t need WBD’s struggling cable networks or regional sports channels, allowing it to focus purely on high-margin digital assets.
Paramount, by contrast, seeks vertical integration: combining production, distribution, and legacy broadcast infrastructure. But in a media landscape rapidly shedding linear TV, that strategy may be outdated. Industry experts note that while Paramount owns valuable franchises like Mission: Impossible and Star Trek, its streaming platform, Paramount+, lags far behind Netflix in both reach and engagement.
“Netflix isn’t just buying content—it’s buying cultural relevance,” said one media analyst familiar with the negotiations. “Warner Bros. gives them instant credibility in tentpole filmmaking and franchise building, something they’ve struggled to replicate organically.”
Financing: Confidence vs. Overreach
Netflix’s ability to finance an all-cash deal without alarming investors speaks volumes about its financial health. After years of prioritizing free cash flow and reducing reliance on debt, the company now sits on a robust war chest. Its stock, though volatile, remains investment-grade, and its subscriber growth in Asia and Latin America continues to outpace rivals.
Paramount’s reliance on Larry Ellison’s backing, while impressive, raises eyebrows. A $40 billion personal guarantee is unprecedented in modern media M&A and suggests traditional lenders remain skeptical. If interest rates stay elevated—as projected through 2026—the cost of servicing $87 billion in debt could consume a significant portion of future revenue, limiting reinvestment in content just when competition is fiercest.
What Comes Next?
A shareholder vote is expected within 60 days. Until then, expect both sides to ramp up outreach: Netflix emphasizing stability and global synergy, Paramount leaning into its premium offer and emotional appeal (“saving Hollywood heritage”). Regulatory scrutiny will also play a role—while neither deal faces immediate antitrust hurdles in the U.S., European and Asian regulators may examine market concentration in streaming.
For now, WBD’s board maintains that Netflix’s offer delivers “superior long-term value with lower execution risk.” But with billions on the line and Hollywood’s future hanging in the balance, the final decision may come down to whether shareholders believe in cautious consolidation—or a high-stakes bet on revival.
One thing is certain: the winner won’t just acquire a studio. They’ll gain the keys to shape the next decade of entertainment.
