As expected over the past week, Netflix has converted its bid for TNT Sports parent company Warner Bros. Discovery to an all-cash structure, responding to rising pressure that includes a hostile bid from Paramount.
The new deal, disclosed early Tuesday, maintains the same overall price of $27.75 per share for WBD, and in turn enterprise value of $82.7 billion, but removes a prior stock consideration of $4.50 worth of Netflix stock for each WBD shareholder. Since the original Netflix-WBD agreement, reached in early December, shares in the streaming giant have fallen about 15%, placing a heightened financial burden and risk on WBD investors.
Additionally, CBS Sports parent company Paramount continues to press on its hostile bid for WBD, even though eight offers for WBD—spanning a time before and after WBD put itself up for sale—have all been turned down by the WBD board, most recently earlier this month.
WBD’s board of directors has approved the new structure, and the two companies said it will provide a quicker timeline and more certainty toward closing, with a WBD shareholder vote slated for April.
“By amending our agreement today, we are underscoring what we have believed all along: not only does our transaction provide superior stockholder value, it is also fundamentally pro-consumer, pro-innovation, pro-creator, and pro-growth,” said Netflix co-CEO Greg Peters.
Looking Ahead
Netflix is looking to acquire WBD’s studios and streaming businesses, while WBD also plans to continue with a planned split of the company that will create Discovery Global, a new holding entity that would house TNT Sports. That split, and the Netflix deal, are slated to close in the latter half of 2026, and a new sports-centric streaming service is under development within TNT Sports and Discovery Global.
WBD shareholders will also get equity in Discovery Global, something that Paramount has alleged in its own analysis will have little to no value for investors. WBD, however, projected in new filings Tuesday that Discovery Global will have an equity value of at least $1.33 per share as a stand-alone entity and as much as $6.86 per share. To help further sweeten the appeal of the planned split, WBD also said Tuesday that it is reducing the debt that will be borne to Discovery Global at the separation by $260 million.
“We can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management’s strategic plans to realize the value of Discovery Global’s iconic brands and global reach,” said WBD board chair Samuel A. Di Piazza Jr.
While the Netflix deal proceeds, Paramount is still looking for a way in with its all-cash, $30 per share bid for all of WBD. Paramount’s latest moves have included initiating a lobbying campaign on Capitol Hill, calling the Netflix bid “presumptively unlawful,” and then suing WBD. A suit from Paramount filed recently in the Delaware Court of Chancery alleged a breach of fiduciary duty and claimed that WBD failed to disclose “basic, material valuation information” integral to shareholders as they decide which bid to accept.
Paramount is also planning a proxy fight and says it will put up its own slate of directors for election to the WBD board.
Netflix, meanwhile, will also release its 2025 fourth-quarter earnings after the close of Tuesday trading.
