Warner Bros Discovery has handed Paramount Skydance a seven-day window to submit what it calls a 'best and final offer' for the company, even as its board continues urging shareholders to accept Netflix's £61.2bn bid. The deadline lands on 23 February, setting up a frantic week of negotiations that will determine whether Netflix completes its transformation from content renter to content owner, or whether legacy Hollywood attempts one last consolidation play against the streaming giants.
The manoeuvre reveals something more intriguing than standard M&A theatre. If Warner Bros Discovery truly believed Netflix offered the superior deal, why grant oxygen to a rival bidder at this late stage? The answer appears to lie in the uncomfortable structural complexity of the Netflix transaction—and mounting boardroom anxiety about whether shareholders will see past the headline valuation to the execution risk beneath.
The deal that requires a deal first
Netflix's £61.2bn offer comes with a significant asterisk. The streaming giant wants Warner Bros Discovery's studio operations, film library, and HBO Max platform, but explicitly doesn't want the cable channels that still generate substantial cash flow. That means CNN, TBS, and TNT Sports UK must first be spun off into a separate entity before Netflix can acquire what remains.
This isn't a minor technical detail. Separating decades-old cable operations from an integrated media company carries tax implications, regulatory hurdles, and the risk that the spin-off entity trades below expectations once isolated from the broader business. Shareholders looking at the £61.2bn figure need to mentally subtract the value of assets they'll receive as shares in a new, unloved cable company rather than cash.
Paramount Skydance's counter-offer, by contrast, carries a headline value of £79.4bn for the entire business—no spin-off required. The comparison isn't direct, since one bid covers assets the other excludes entirely, but the optics create pressure. Warner Bros Discovery's board must demonstrate to investors that it genuinely explored whether the simpler, higher-numbered alternative could deliver more certain value.
David Zaslav, the company's chief executive, framed the seven-day window as evidence of that diligence, stating that Warner Bros Discovery has 'provided Paramount Skydance with clear direction on the deficiencies in their offers and opportunities to address them'. The language suggests previous Paramount bids fell short on financing certainty or regulatory approvals—the kind of details that matter more than headline valuations when boards face shareholder litigation.
What Netflix actually gets
The strategic stakes extend well beyond Warner Bros Discovery's boardroom calculations. If Netflix completes this acquisition, it fundamentally alters the company's relationship with premium content. For years, Netflix licensed HBO series and Warner film franchises on multi-year contracts, paying billions whilst the intellectual property remained with its creator. Ownership changes that equation permanently.
HBO's library alone represents perhaps the most prestigious collection in television: The Sopranos, The Wire, Game of Thrones, Succession. Warner Bros brings Harry Potter, DC Comics adaptations, and decades of film franchises. Netflix would control these assets outright, no longer vulnerable to licence renewals or rival platforms outbidding for rights when contracts expire.
What's interesting here is the signal it sends about Netflix's strategic evolution. The company spent its first decade proving that technology platforms could compete with traditional studios by producing their own content. This acquisition would flip that narrative—Netflix concluding that owning legacy Hollywood's crown jewels matters more than building everything from scratch.
The Paramount calculation
Paramount Skydance's persistence in pursuing Warner Bros Discovery, despite repeated rejections, reflects its own existential calculus. The combined entity would create the last true alternative to Disney and the tech-platform streamers—large enough to compete globally, with sufficient content volume to sustain multiple streaming services and traditional distribution channels.
Skydance, backed by Oracle founder Larry Ellison's son David, already controls Paramount through a previous merger. Adding Warner Bros Discovery would give it HBO, CNN, and Warner's film studio alongside Paramount's Mission: Impossible, Star Trek, and CBS broadcast network. Scale matters in an industry where content costs keep rising whilst subscription growth plateaus in developed markets.
The February 23 deadline creates genuine pressure despite Warner Bros Discovery's stated preference for Netflix. Paramount Skydance must now either produce financing commitments and regulatory clearances that address previous 'deficiencies', or step aside and watch Netflix absorb a major competitor. The compressed timeline suggests Warner Bros Discovery wants this resolved before its shareholder vote, currently scheduled for early March according to regulatory filings.
Whether Paramount can assemble a genuinely superior offer in seven days depends largely on questions Warner Bros Discovery has presumably been asking for weeks: can Ellison-backed financing match Netflix's certainty of funds, and will antitrust regulators view a Hollywood studio merger more favourably than a tech platform acquisition? The answers will determine whether Netflix's transformation into a traditional media owner proceeds, or whether legacy Hollywood gets one more attempt at consolidation before the streaming wars' next phase begins.