PARAMOUNT COMMENTS ON WARNER BROS. DISCOVERY BOARD'S DETERMINATION OF PARAMOUNT'S PROPOSAL AS SUPERIOR
LOS ANGELES and NEW YORK, Feb. 26, 2026 -- Paramount Skydance Corporation (NASDAQ: PSKY) ("Paramount") confirms that it has been notified by Warner Bros. Discovery, Inc. (NASDAQ: WBD) ("WBD") that WBD's Board of Directors has determined that Paramount's $31 per share, all-cash proposal to acquire WBD is a "Company Superior Proposal" under the terms of WBD's merger agreement with Netflix, Inc. (NASDAQ: NFLX).
David Ellison, Chairman and CEO of Paramount, said: "We are pleased WBD's Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing."
Under the terms of Paramount's proposed merger agreement:
- Paramount will acquire WBD for $31.00 per WBD share in cash for 100% of the company;
- A daily "ticking fee" of $0.25 per quarter will accrue after September 30, 2026, until the consummation of the Paramount transaction;
- A regulatory termination fee of $7 billion would be payable in the event the transaction does not close due to regulatory matters;
- Paramount will pay the $2.8 billion termination fee which WBD is required to pay to Netflix to terminate its existing Netflix merger agreement;
- Paramount will eliminate WBD's potential $1.5 billion financing cost associated with its debt exchange offer;
- The "Company Material Adverse Effect" definition excludes the performance of WBD's Global Linear Networks business;
- The Ellison Trust is providing a $45.7 billion equity commitment, and Larry Ellison is guaranteeing such commitment, including an obligation to contribute additional equity funding to Paramount to the extent needed to support the solvency certificate required by Paramount's lending banks, and
- Bank of America Merrill Lynch, Citi and Apollo are providing a $57.5 billion debt commitment.
The entry into Paramount's proposed transaction requires the expiration of a four business day match period, termination of the Netflix merger agreement and execution of a definitive merger agreement between Paramount and WBD.
As previously announced, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act applicable to Paramount's acquisition of WBD expired at 11:59 pm on February 19, 2026.
Centerview Partners LLC and RedBird Advisors are acting as lead financial advisors to Paramount, and Bank of America Securities, Citi, M. Klein & Company and LionTree are also acting as financial advisors. Cravath, Swaine & Moore LLP and Latham & Watkins LLP are acting as legal counsel to Paramount.
About Paramount, a Skydance Corporation
Paramount, a Skydance Corporation (Nasdaq: PSKY) is a leading, next generation global media and entertainment company, comprised of three business segments: Studios, Direct-to-Consumer, and TV Media. The Company's portfolio unites legendary brands, including Paramount Pictures, Paramount Television, CBS – America's most-watched broadcast network, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance's Animation, Film, Television, Interactive/Games, and Sports divisions. For more information please visit www.paramount.com.
Cautionary Note Regarding Forward-Looking Statements
This communication contains both historical and forward-looking statements, including statements related to Paramount Skydance Corporation's ("Paramount") future financial results and performance, potential achievements, anticipated reporting segments and industry changes and developments. All statements that are not statements of historical fact are, or may be deemed to be, "forward-looking statements". Similarly, statements that describe Paramount's objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect Paramount's current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will," "may," "could," "estimate" or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause Paramount's actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: the outcome of the tender offer by Paramount and Prince Sub Inc. (the "Tender Offer") to purchase for cash all of the outstanding Series A common stock of Warner Bros. Discovery, Inc. ("WBD") or any discussions between Paramount and WBD with respect to a possible transaction (including, without limitation, by means of the Tender Offer, the "Potential Transaction"), including the possibility that the Tender Offer will not be successful, that the parties will not agree to pursue a business combination transaction or that the terms of any such transaction will be materially different from those described herein; the conditions to the completion of the Potential Transaction or the previously announced transaction between WBD and Netflix, Inc. ("Netflix") pursuant to the Agreement and Plan of Merger, dated December 4, 2025, among Netflix, Nightingale Sub, Inc., WBD and New Topco 25, Inc. (the "Proposed Netflix Transaction"), including the receipt of any required stockholder and regulatory approvals for either transaction, the proposed financing for the Potential Transaction, the indebtedness Paramount expects to incur in connection with the Potential Transaction and the total indebtedness of the combined company; the possibility that Paramount may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate the operations of WBD with those of Paramount, and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the Potential Transaction; risks related to Paramount's streaming business; the adverse impact on Paramount's advertising revenues as a result of changes in consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries, including cost increases; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to Paramount's decisions to make investments in new businesses, products, services and technologies, and the evolution of Paramount's business strategy; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of Paramount's content; damage to Paramount's reputation or brands; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and content; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; domestic and global political, economic and regulatory factors affecting Paramount's businesses generally, including tariffs and other changes in trade policies; the inability to hire or retain key employees or secure creative talent; disruptions to Paramount's operations as a result of labor disputes; the risks and costs associated with the integration of, and Paramount's ability to integrate, the businesses of Paramount Global and Skydance Media, LLC successfully and to achieve anticipated synergies; volatility in the prices of Paramount's Class B Common Stock; potential conflicts of interest arising from Paramount's ownership structure with a controlling stockholder; and other factors described in Paramount's news releases and filings with the Securities and Exchange Commission (the "SEC"), including but not limited to Paramount Global's most recent Annual Report on Form 10-K and Paramount's reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that Paramount does not currently view as material or that are not necessarily known. The forward-looking statements included in this communication are made only as of the date of this report, and Paramount does not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.
Additional Information
This communication does not constitute an offer to buy or a solicitation of an offer to sell securities. This communication relates to a proposal that Paramount has made for an acquisition of WBD, the Tender Offer that Paramount, through Prince Sub Inc., its wholly owned subsidiary, has made to WBD stockholders, and Paramount's intention to solicit proxies against the Proposed Netflix Transaction and other proposals to be voted on by WBD stockholders at the special meeting of WBD stockholders to be held to approve the Proposed Netflix Transaction (the "Netflix Merger Solicitation") and/or for use at the WBD annual meeting of stockholders. The Tender Offer is being made pursuant to a tender offer statement on Schedule TO (including the offer to purchase, the letter of transmittal and other related offer documents), filed with the SEC on December 8, 2025. These materials, as may be amended from time to time, contain important information, including the terms and conditions of the offer. Subject to future developments, Paramount (and, if a negotiated transaction is agreed, WBD) may file additional documents with the SEC. This communication is not a substitute for any proxy statement, tender offer statement, or other document Paramount and/or WBD may file with the SEC in connection with the Potential Transaction.
Paramount, Prince Sub Inc. and the other participants in the Netflix Merger Solicitation have filed a preliminary proxy statement and the accompanying BLUE proxy card with the SEC on January 22, 2026 in connection with the Netflix Merger Solicitation (the "Special Meeting Preliminary Proxy Statement"). Paramount expects to file a definitive proxy statement and the accompanying proxy card with the SEC in connection with the Netflix Merger Solicitation and may file other proxy solicitation materials in connection therewith or the annual meeting of WBD stockholders, or other documents with the SEC.
PARAMOUNT STRONGLY ADVISES ALL STOCKHOLDERS OF WBD TO READ THE SPECIAL MEETING PRELIMINARY PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATED TO THE PARTICIPANTS. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, PARAMOUNT AND THE OTHER PARTICIPANTS IN SUCH PROXY SOLICITATIONS WILL PROVIDE COPIES OF THE APPLICABLE PROXY STATEMENTS WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE APPLICABLE PROXY SOLICITOR.
Participants in the Solicitation
The participants in the Netflix Merger Solicitation are expected to be Paramount, Prince Sub Inc., certain directors and executive officers of Paramount and Prince Sub Inc., Lawrence Ellison, RedBird Capital Management and The Lawrence J. Ellison Revocable Trust, u/a/d 1/22/88, as amended. Additional information about the participants in the Netflix Merger Solicitation is available in the Special Meeting Preliminary Proxy Statement.
PSKY-IR
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Following the confirmation, Netflix, Inc. announced that it has declined to raise its offer for Warner Bros.
A potential Paramount-WBD merger would most likely bring Nickelodeon and Cartoon Network, along with their subsidies such as Nick Jr., Nicktoons, Boomerang and Cartoonito, under the same parent company.
From Deadline:
WBD’s David Zaslav Wishes Netflix Well, “Can’t Wait” To Start Working With Paramount
That was fast. A week ago Warner Bros. Discovery had a deal in hand with Netflix. Today, it wished the giant streamer well but has moved on.
“Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us. We wish them well in the future,” said WBD CEO David Zaslav in a statement after his company earlier in the day shifted its sights to Paramount’s “company superior offer,” which Netflix decided not to counter.
“Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
Ted Sarandos and Greg Peters are co-CEOs of Netflix. Spencer Neumann is its CFO.
Samuel A. Di Piazza, Jr., chair of the Warner Bros. Discovery board, said today he’s “extremely proud of the rigorous process this Board has run over the past five and a half months that has led us to the cusp of combining these two storied companies and the excitement it will bring to audiences for many years to come.”
It’s tough out there.
WBD agreed in a December 5 deal to sell its streaming and studio assets to Netflix for what ended up being $27.75 a share in cash. Paramount’s David Ellison continued to lob offers for the entire company, all rejected, but sweeteners in the last bid convinced WBD a conversation was needed and from that emerged what was deemed the superior offer.
Netflix had four business days to match, starting today, but opted instead to bow out.
There are a few consolations. Netflix stock is up today — investors disliked the deal, preferring the streamer as it has mostly been, a finally tuned precision tool, no big complications.
Netflix will also walk away with a cool $2.8 billion breakup fee from WBD (but funded by Paramount).
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From Deadline:
“Not A Done Deal”: California AG Warns Paramount + WBD Merger Far From Certain
The champagne corks may be popping right now at Paramount over the David Ellison-owned company’s successful bid for Warner Bros Discovery, but up in Sacramento the mood is far from celebratory over the latest possible Hollywood mega-merger.
“Paramount/Warner Bros is not a done deal,” California Attorney General Rob Bonta told Deadline this evening after Netflix dropped out of bidding for WB’s studio and streaming assets.
“These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” the Golden State’s top lawman added.
Bonta’s cold water on the Paramount-WBD fireworks comes a week after the CA Department of Justice opened a probe into any deal to take over WB — be it Netflix or Ellison’s team. A probe that could see legal action if the deal doesn’t pass muster.
“The film and entertainment industry not only has historical importance to our state, it also is a critical sector that buoys the state’s economy of California and touches the lives of Americans daily,” the ambitious AG said on February 20. “The proposed Warner Brothers transactions must receive a full and robust review, and California is taking a very close look.”
While not as harsh as Sen. Elizabeth Warren’s prediction of an “antitrust disaster” out of a Paramount and WBD union, Bonta’s words echoed to some extent those of fellow Democrat and California’s junior Senator Adam Schiff from earlier today. Both Sens. Warren and Schiff point to potential inside influence after Donald Trump‘s “good friend” Ellison seemingly snagged his second legacy studio in less than two years.
“What was true for Netflix is still true now for Paramount,” Sen. Schiff said Thursday “The merger of two of Hollywood’s biggest studios must be subject to the highest levels of scrutiny, free from White House political influence, to determine its impact on American jobs, freedom of speech, and the future of one of our nation’s greatest exports.”
On the other side of America’s fractured political spectrum, the cautions expressed by AG Bonta and Sen. Schiff, were mirrored to some extent by 11 GOP Attorneys Generals in a letter sent to Pam Bondi on the same day of the State of the Union. On the back of a DOJ antitrust probe launched on February 20, the state AGs on February 24 told the federal AG they wanted “to express our concerns that the proposed merger between Netflix and Warner Brothers will likely result in undue market concentration that stifles competition and therefore creates higher prices, lower reliability, and less innovation for one of America’s major industries — all to the detriment of American consumers.”
In what is now a moot measure, the MAGA AGs were from Montana, Alabama, Alaska, Iowa, Kansas, Nebraska, North Dakota, South Carolina, Tennessee, Utah and West Virginia.
California Governor Gavin Newsom, who pushed to have the state’s film and TV tax credit program pumped up to $750 million last year, to kick start production and industry employment, has not yet spoken out on today’s big Tinseltown shifts. Neither for that matter, has Trump, who Newsom relentlessly trolls online.
In both men’s cases, it is surely a matter of when.
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Official Paramount Skydance Corporation press release courtesy of PR Newswire; H/T: TheFutonCritic.com.
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