$108B Rejected: Why the Warner Bros Discovery Netflix Merger Won

Size isn't everything in the streaming wars—financial health is. Warner Bros. Discovery (WBD) has officially snubbed a $108.4 billion revised bid from Paramount Skydance, opting instead to move forward with a $82.7 billion deal with Netflix. The decision marks a major turning point in the race to consolidate Hollywood's most valuable libraries.

Inside the Warner Bros Discovery Netflix Merger Preference

The board's rejection of Paramount was unanimous. In a pointed letter to shareholders, WBD labeled the Paramount proposal an "illusory" leveraged buyout that would saddle the combined entity with $87 billion in new debt. For a company like Paramount with a $14 billion market capitalization, seeking $94.65 billion in financing was deemed a bridge too far, posing "materially more risk" than the Netflix merger.

The Ellison Factor and Financial Stability

Even with a $40 billion guarantee from Oracle co-founder Larry Ellison, the bid from his son David Ellison's Skydance couldn't match the sheer financial muscle of Netflix. Netflix currently boasts a market cap of roughly $400 billion and an investment-grade balance sheet. WBD argued that Paramount's reliance on $54 billion in additional debt would only worsen its existing junk credit rating, threatening the long-term viability of the studio's legendary library.