Update 2/26 [6:00 p.m. ET]: According to multiple reports, Netflix has officially pulled its offer to purchase Warner Bros. Discovery’s streaming services and studios businesses. Paramount will purchase Warner Bros. Discovery pending regulatory approval. Our post has been updated.
The Warner Bros. Discovery board has declared Paramount’s latest offer for the company constitutes a “superior” proposal to the deal it had already agreed to with Netflix.
The announcement, made Thursday afternoon, deemed Paramount’s $31-per-share offer for the entirety of WBD to be in the best interest of shareholders, a stark departure from the last several months, when the WBD board has repeatedly reiterated its support for the Netflix deal. Paramount’s newest bid increases the per-share price it would pay for the company by $1.00 and also includes provisions designed to protect WBD from a potential regulatory standstill.
Just hours after the WBD board made its announcement, Netflix decided to pull its offer, officially bowing out of the process. The streaming giant’s initial deal with WBD paid shareholders $27.75 for WBD’s streaming assets, including HBO Max and its movie studio. The remainder of WBD, including its cable assets like CNN and TNT Sports, would have been spun out into a company called Discovery Global, which shareholders would have also received equity in.
As part of Paramount’s newest offer, the company will institute a “ticking fee” of $0.25 per share for each quarter a deal does not receive regulatory approval. That would amount to approximately $650 million per quarter. Paramount will also pay a $7 billion regulatory termination fee if a deal is not approved by government regulators. These two sweeteners come in addition to Paramount’s pledge to cover WBD’s breakup fee with Netflix, which will amount to an additional $2.8 billion.
With Paramount set to purchase the whole of WBD, TNT Sports will likely find itself combined with CBS Sports, creating a wide-ranging sports portfolio that includes the NFL, College Football Playoff games, the entirety of March Madness, MLB and NHL playoffs, multiple golf majors including the Masters, UFC, NASCAR, the French Open, and more.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.