Paramount Skydance Will Pay WBD Shareholders an Extra $650 Million per Quarter if Its Takeover Isn’t Completed by End of 2026

David Ellison’s Paramount Skydance is adding some additional financial promises to its hostile takeover bid for Warner Bros. Discovery as it continues to try to kill Netflix’s deal for WB.

Paramount on Tuesday said it will add an “incremental cash consideration” to WBD shareholders of 25 cents per share, equivalent to approximately $650 million cash value each quarter, for every quarter the proposed Paramount acquisition is not closed beyond Dec. 31, 2026.

That extra “ticking fee” reflects the confidence of Ellison and his team that a Paramount-WBD deal will have a smoother path to regulatory approval than Netflix’s merger with Warner Bros. Paramount (and others) have alleged that Netflix, if it owns HBO Max, would have a virtual monopoly on subscription streaming in multiple markets; Netflix has dismissed this, claiming that even with HBO Max its share of U.S. TV viewing would be 10%, still behind YouTube.

In addition, as part of Paramount’s sweetened deal terms for Warner Bros. Discovery, the company said it would pay the $2.8 billion breakup fee due to Netflix with the termination of the Netflix agreement if WBD shareholders accept Paramount’s $30-per-share offer for Warner Bros. Discovery in its entirety.

Paramount also said it will eliminate WBD’s potential $1.5 billion financing cost associated with its debt exchange offer by “fully backstopping an exchange offer that relieves WBD of its contractual bondholder obligations.” Paramount said it will fully reimburse WBD shareholders for the $1.5 billion fee, without reducing the separate $5.8 billion reverse-termination fee, in the “unlikely event” that the Paramount transaction is blocked by regulators.

Paramount also extended the expiration date of its tender offer, with the revised terms, to March 2, 2026. WBD is expected to hold a special meeting of shareholders in late March or early April to vote on the Netflix deal.

Warner Bros. Discovery said that its board would review the new Paramount terms but said that — for now — it’s not changing its recommendation that shareholders OK the deal with Netflix. Netflix did not immediately respond to requests for comment.

Paramount sent a letter to the WBD board of directors outlining the terms of its enhanced offer. So far, the WBD board has rejected Ellison’s M&A overtures eight times — and has repeatedly said it will stick with Netflix’s $27.75/share deal to acquire Warner Bros.’s films and TV studios and HBO Max, inked in early December.

David Ellison, chairman and CEO of Paramount, said in a statement: “The additional benefits of our superior $30-per-share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment. We are making meaningful enhancements — backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility.”

Other promises Paramount Skydance is making in its amended takeover offer:

• If WBD’s financing sources will not extend the maturity of WBD’s existing $15 billion bridge loan, Paramount’s debt financing sources are “fully prepared to do so (with any incremental costs covered by Paramount).” Alternatively, Paramount will permit WBD to structure permanent financing “in any way it chooses” as long as the debt is redeemable at a “commercially reasonable cost.”
• Paramount said it will provide WBD “flexibility” between signing and closing including by matching any comparable Netflix interim operating covenants.
• With respect to Discovery Global (WBD’s proposed linear TV spin-off), Paramount said it is “open to discussing with the WBD Board of Directors contractual solutions to account for the possibility of continuing deteriorating financial performance beyond what WBD is currently projecting for its linear network business.”

Paramount’s amended offer, with an enterprise value of about $108 billion, is “fully financed” by an increased $43.6 billion of equity commitments from Larry Ellison (David’s tech-billionaire father) and RedBird Capital Partners, alongside $54 billion of debt commitments from Bank of America, Citigroup and Apollo. Other backers of Paramount’s WBD bid include the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi.

As with Paramount’s Dec. 22 offer, Paramount’s financing includes an “irrevocable personal guarantee from Larry Ellison” of $43.3 billion, which covers the equity financing for the M&A offer as well “any damages claims against Paramount.”

Warner Bros. Discovery has said it expects to spin off Discovery Global, which will comprise CNN, TNT, TBS, Food Network, HGTV and other cable nets as well as Discovery+ and other assets, in the third quarter of 2026, prior to the Netflix deal close.

WBD has said the target amount of net debt for Discovery Global is $17.0 billion as of June 30, with decreases over time to $16.1 billion as of Dec. 31, 2026.

Paramount claims its analysis shows that if Discovery Global is spun off with debt leverage in line with Versant Media Group — the TV-centric entity that separated earlier this year from Comcast’s NBCUniversal — the Netflix cash consideration would be reduced to $23.20 per share. Assuming both a valuation multiple and leverage ratio in line with Versant, Discovery Global’s equity value would be about $3.55 per share, resulting in total value of only about $26.75 for the Netflix deal, according to Paramount. That would make Paramount’s $30/share all-cash offer 12% higher than what WBD shareholders get from the Netflix transaction, Paramount claims.

With the Netflix deal, WBD shareholders would have equity in Discovery Global, “whose business is in decline and would need to support an unrealistic debt load of $17 billion (at June 30, 2026) to achieve the high end of the Netflix consideration range,” Paramount said.

Also Tuesday, Paramount said it “continues to make progress in its regulatory clearance process.” On Feb. 9, 2026, Paramount Skydance certified that is has complied with the Department of Justice’s December 23, 2025, Second Request for Information related to its all-cash tender offer to purchase shares of Warner Bros. Discovery. Separately, Paramount also secured clearance for its tender offer from the foreign investment authorities in Germany on Jan. 27, 2026.