On February 27, 2026, Paramount Skydance announced its intent to acquire Warner Bros. Discovery (WBD) for $31 per share, valuing the company at $110.9 billion. The acquisition is being funded by the Ellison family and RedBird Capital Partners, with additional funding being provided by the sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates (which will hold non-voting shares in the company). The acquisition came following initial plans by WBD to split back into two companies, separating its less-profitable linear television assets (including the legacy Turner networks such as CNN) from the flagship Warner Bros. (WB) studio business, HBO, and streaming service HBO Max.
After Paramount Skydance began making unsolicited offers to acquire WBD as a whole, the WBD board of directors placed the company up for auction on October 21, 2025, to maximize shareholder value. The auction was won in December 2025 by Netflix, Inc., which offered $82.7 billion to acquire just the WB studio business. Paramount Skydance continued to make unsolicited offers for the entirety of WBD, arguing that a Netflix acquisition of WB would give it an undue position in the subscription video on demand (SVOD) market, and that the company's attitudes towards theatrical film were potentially damaging to the cinema industry. Paramount Skydance CEO David Ellison stated that it would release at least 30 films per year if it acquired WBD, and would maintain industry standard release windows and the creative independence of divisions such as HBO.
In February 2026, Paramount Skydance made a revised offer to acquire WBD at $31 per share, pay Netflix's breakup fee, and—as a display of confidence that the sale would be approved and completed quickly—pay an ongoing penalty to WBD shareholders if the sale was not completed by a specific deadline. Paramount's offer was deemed superior by the WBD board, and was approved by its shareholders on April 23, 2026. On June 12, 2026, the sale was approved by the U.S. Department of Justice.
Supporters argue that the acquisition is necessary for the studios to achieve the scale needed to compete with tech companies, while preserving a commitment to the cinema industry. Members of the film industry have expressed concern over the resulting scale of the company, its potential impact on movie theaters, cable television, and jobs, as well as the Ellison family's relationship with the Trump administration and its potential influence on the editorial operations of CNN. The European Commission imposed conditions requiring Paramount Skydance to exit its United International Pictures distribution venture with Universal Pictures, while the United Kingdom is requiring that its individual news and children's businesses maintain editorial independence, and will prohibit the combination of its linear and on-demand services for five years.
In July 2026, California and 11 other U.S. states, as well as the Writers Guild of America, filed antitrust lawsuits in a federal court to delay the consummation of the purchase. California argued that the combined company's share of box office and cable television revenue post-acquisition would give it undue leverage over film exhibitors and television providers, and that the consolidation could reduce viewpoint diversity and the quality of its output. On September 21, 2026, Paramount Skydance announced an out-of-court settlement with the twelve states, subject to a five-year consent decree mandating specific investments towards film production and acquisition, restrictions on its engagement with film exhibitors and television providers, and the establishment of an independent board to oversee the editorial integrity and independence of CBS News and CNN post-acquisition, among other conditions. Amid concerns that the antitrust remedies were not strong enough to address the original concerns, the settlement was approved by the court on September 30, 2026. Paramount Skydance completed the acquisition by October 6, 2026, with Ellison also announcing that the combined company would be known as Skydance Corporation.
Background WBD was established on April 8, 2022, and created through AT&T's divestment of WarnerMedia and WarnerMedia's subsequent merger with Discovery, Inc., via a Reverse Morris Trust transaction. Through the agreement, Discovery executives would assume majority control over the merged company, while AT&T would no longer hold any ownership interest. AT&T attempted to reinvent itself as a major player in the entertainment industry through acquiring Time Warner and DirecTV, but later reversed course after losses and unsuccessful synergies. Issues facing WBD were its initial debt load of over $43 billion and heavy market devaluation of its stock, with it losing over 60% of its value by early 2025. To bring down debt, WBD began undertaking strict cost-cutting strategies that included corporate reorganization, controversial tax write-offs, and the removal of dozens of movies and television shows from HBO Max. Despite these efforts, the linear cable networks of WBD continued to lag behind in profits compared to the more profitable streaming and studios businesses.
On December 12, 2024, WBD restructured its operations into two divisions: Streaming & Studios and Global Linear Networks. WBD president and CEO David Zaslav said the new structure would provide "flexibility with potential future strategic opportunities." On June 9, 2025, WBD announced plans to separate into two companies by mid-2026. The successor companies would have been named "Warner Bros.", comprising the Streaming & Studios division, and "Discovery Global", comprising the Global Linear Networks division. Industry analysts offered mixed assessments of the announcement. Some characterized it as an acknowledgment that the 2022 Warner Bros. Discovery merger had underperformed, while others suggested that the separation could make Warner Bros. a more attractive acquisition target for larger companies that were uninterested in its cable networks.
Initial bidding war
In September 2025, Paramount Skydance CEO David Ellison convened a board meeting to discuss a possible acquisition of WBD, a move reported as intended to strengthen Paramount's competitive position against Amazon, Disney, and Netflix. Several days later, Ellison met with Zaslav at his home to propose a cash-and-stock bid of $19 per share. The offer was formalized in a subsequent letter that set the cash component at 60 percent. Later in September, Paramount Skydance raised its offer to $22 per share with a 67 percent cash component, a $2 billion reverse termination fee payable if the deal failed to clear regulatory review, and a provision for Zaslav to remain as co-CEO and co-chairman of the combined company. On October 13, 2025, Paramount Skydance submitted a third offer, raising the bid to $23.50 per share with an 80 percent cash component. WBD continued to reject Paramount's proposals.
After Paramount's three failed attempts, talks of a potential sale of WBD began circulating in October, and the company announced it was reviewing strategic alternatives to its previously announced plan to split into two companies after receiving unsolicited interest from multiple parties.
In the first round of non-binding proposals submitted on November 20, 2025, Paramount submitted a $25.50 per share offer for the entire company, Netflix and Comcast submitted bids to acquire the Warner Bros. studios and intellectual properties, HBO and HBO Max, and Starz submitted a $25 billion bid for WBD's Global Linear Networks division and 20% of its Streaming & Studios division. After the auction process concluded in December, Standard General was approached by Warner Bros. Discovery shareholders about a potential acquisition of WBD's Global Linear Networks division.
After the initial round of bids, WBD solicited a second round of bids. On December 1, 2025, Netflix, Paramount and Comcast all once again submitted binding second-round bids, with Paramount submitting an all-cash $26.50 per share offer for the entire company.
As the process moved to a final decision, Paramount sent a letter to Zaslav alleging that the sale had become "tilted" in favor of Netflix. The letter claimed that the WBD board had embarked on "a myopic process with a predetermined outcome", pointing to alleged conflicts of interest regarding the friendship of Zaslav and Netflix co-CEO Ted Sarandos and questioning whether the auction remained fair. The Wall Street Journal reported that Paramount's final offer was $30 per share, all-cash, and it had secured arrangement from its three Middle Eastern sovereign wealth backers to not take board seats that would trigger increased regulatory review.
Netflix agreement
On December 5, 2025, multiple news outlets reported that Netflix had emerged as the leading bidder and had entered exclusive negotiations with WBD to acquire its studio and streaming business, despite objections from Paramount Skydance. Netflix announced the acquisition shortly after, which valued WBD at $82.7 billion enterprise value ($72.0 billion equity value and $59 billion of debt from Wells Fargo, HSBC, and BNP Paribas), and priced post-split Warner Bros. shares at US$27.75. The acquisition would mark a departure from Netflix's stated "builders, not buyers" strategy and a shift toward growth through acquisition. Analysts had not widely anticipated Netflix's participation in the auction process prior to the December reports. Analysts also estimated that a merged Netflix–Warner Bros. entity would have controlled 30.3% of the U.S. streaming market.
Opponents of the acquisition, including trade unions such as the Writers Guild of America and Directors Guild of America, warned that combining WBD's film and television library with Netflix's streaming platform could increase market concentration, reduce competition, and limit creative diversity by consolidating control over content production, distribution, and release strategies within a single company, threatening competitive opportunities for talent. SAG-AFTRA stated that its final position would depend on a full review of the proposal, but that that any merger should increase production and protect jobs.
Cinema United—a trade association representing the U.S. cinema industry—raised concerns that Netflix would not support the theatrical release of Warner Bros. films, estimating a potential loss of 25% of domestic box office revenue attributed to its releases. The Committee for the First Amendment described the deal as an "alarming escalation of the consolidation that threatens the entire entertainment industry, the democratic public it serves and the First Amendment", and called upon regulators to ensure that they "categorically refrain from using [their] power to extract political concessions that influence content decisions or chill free speech."
On January 22, 2026, the U.S. Department of Justice (DOJ) launched an antitrust review of Netflix's proposed deal. WBD disclosed in a regulatory filing that both companies had received a formal "second request" for information from the DOJ's Antitrust Division on January 16, which paused the statutory waiting period and prevented the transaction from closing pending further review. The second request signaled heightened scrutiny of whether the transaction could lessen competition in streaming, film production, or television distribution markets.
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