Warner Bros. Officially Rejects Paramount Again—Netflix Deal Moves Forward

A few days ago, I posted an update on the Netflix-Warner Bros. acquisition saga, noting that Warner Bros. Discovery was expected to reject Paramount's hostile bid for the second time.

Well, it's official.

Warner Bros. Says No (Again)

Today (January 7, 2026): Warner Bros. Discovery's board **unanimously rejected Paramount's revised $108.4 billion bid**, calling it a "risky leveraged buyout" that would saddle the company with $87 billion in debt.2 3

The board told shareholders to **reject Paramount's tender offer** and stick with Netflix's deal.7

This is the second official rejection of Paramount's hostile bid:

First rejection: December 17, 2025
Second rejection: January 7, 2026 (today)

What Changed (And What Didn't)

After the first rejection, Paramount tried to address Warner Bros.' concerns by bringing in **Larry Ellison (Oracle co-founder) to personally guarantee over $40 billion** of the financing.1

It didn't work.

WBD's official statement: The board said Paramount's proposal "is inferior given significant costs, risks and uncertainties as compared to the Netflix merger."6

The board specifically called out that Paramount's bid is essentially a "leveraged buyout" that would burden the company with massive debt, despite Ellison's personal guarantee.3 8

Netflix Responds

Netflix welcomed WBD's "continued commitment to the merger agreement" and thanked the board for unanimously recommending shareholders reject Paramount's offer.1

The Breakup Fee Reminder

If WBD abandons Netflix's deal, they'd owe Netflix a **$2.8 billion termination fee**.2

WBD also cited "the potential value of its cable assets, which Netflix is not acquiring." WBD's cable channels (including CNN) are being spun off into a new publicly traded company called Discovery Global later this year.4

Why Warner Bros. Keeps Choosing Netflix

Despite:

A higher cash offer ($30/share vs Netflix's $27.75)
Larry Ellison's personal $40+ billion guarantee
Saudi Arabia's PIF + Jared Kushner's Affinity Partners backing

Warner Bros. keeps choosing Netflix. Here's why:

1. Less debt. Paramount's bid would saddle WBD with $87 billion in debt. Netflix's deal is cleaner.

2. Netflix's offer includes keeping theatrical releases. Warner Bros. has contractual obligations for theatrical releases, and Netflix has explicitly committed to maintaining them.

3. Less regulatory risk. A Paramount-WBD mega-merger would create a massive traditional media conglomerate. Netflix's deal is just studios and streaming—no cable networks.

4. The breakup fees favor Netflix. Netflix is confident enough to put $5.8 billion on the line if regulators block the deal.

What Happens Next

The board is making it crystal clear: they want the Netflix deal, not Paramount's. Paramount set a deadline of January 8, 2026 (tomorrow) for WBD stockholders to tender their shares.

Politics are expected to come into play, and "the process could drag on for more than a year, if not longer."5

But as of today, Warner Bros. has officially rejected Paramount's bid for the second time, and the Netflix deal is moving forward.

The consolidation is still happening. We're just watching Warner Bros. make it very clear who they want to consolidate with—and it's not Paramount, no matter how much Saudi money and Kushner backing they bring to the table.

What do you think about the Streaming Wars?

Find me on Mastodon at @ppb1701@ppb.social and let me know your thoughts.