Will Warner Bros. Discovery Opening Up Merger Talks Again Finally Bring Some Clarity to the Paramount vs. Netflix Back and Forth?

Netflix is agreeing to give Paramount a 7-day window to lay its cards on the table. Will it finally bring an end to the saga?

There’s been a lot of noise over the last couple of months about whether Netflix ultimately would acquire Warner Bros. Discovery’s (WBD) film and TV studio or if Paramount-Skydance (PSKY) would prevail in throwing enough money at the problem and win the rights itself. When even John Oliver is saying on the season premiere of “Last Week Tonight” he doesn’t know who his new “business daddy” will be, you know things have gotten confusing.

For that reason, we’ve largely stayed out of all the loud back and forth that’s gone on in the press, parsing each of the nine separate offers PSKY has made, giving more oxygen to the activist investor calling for a No vote on the Netflix deal, or reading the tea leaves between each WBD response about how it really feels about David Ellison and company. The general public — and especially the people that work at each of these companies — isn’t concerned with what the stock price is or which merger offers the most shareholder value, it just wants answers to a few simple questions: What’s going to happen to my favorite movies and shows, will I still have a job, and when is this all going to end?

Having that uncertainty and unease hanging over Hollywood is never fun, but early on Tuesday, February 17, a development in the WBD/Netflix/PSKY saga finally cut through the noise and seems to hint at a conclusion to it all. Warner Bros. Discovery and Netflix took a highly unusual step and allowed WBD to again engage Paramount in talks for a merger. The WBD board has given Paramount seven days to lay all its cards on the table and fix what it says are “deficiencies that remain unresolved” in its proposals.

At the same time, Warner Bros. Discovery has set a date for a vote, March 20, for when shareholders can decide on which deal they want once and for all. And for now, WBD is still recommending that all those shareholders vote to approve the Netflix deal, not Paramount’s.

In a statement, Paramount essentially said it would play ball with the 7-day waiver period, even though it believes it still has the superior offer and should be able to negotiate without a time limit. Netflix meanwhile said Paramount has “repeatedly mischaracterized the regulatory review process” suggesting that it would have a better chance of getting a merger through the Trump administration than Netflix would.

The reason Netflix is entertaining this at all, however, is that it wants all this uncertainty to end just as much as you do. WBD wants PSKY to make its “best and final offer,” and in its statement this morning, WBD said PSKY already informed them that its most recent offer wasn’t it.

“They’ve kind of lost credibility,” David King, Higdon Professor of Management in the Herbert Wertheim College of Business at Florida State University, told IndieWire of Paramount-Skydance. He argues that not giving the “best and final offer” is telling, especially after months of bids.

“I think what [WBD’s] trying to do is just, well, then make your best offer. If it’s more than what Netflix’s is that they made, great, and if it’s not, then please go away,” King said.

Netflix of course has the opportunity to match whatever deal Paramount puts on the table. So King says what this also does is require Paramount to more formally disclose certain details that have previously made its offer less believable. That could include solidifying whether Larry Ellison will in fact guarantee financing as he previously said, what specific regulatory concerns it believes it can navigate, and perhaps even what Paramount’s vision for WBD would be. And at the end of the day, it may even make Netflix look better.

“I do think what it does signal is a confidence on Netflix’s front to say, you know what, we’re not hiding anything,” said J. Christopher Hamilton, a professor with Syracuse University and a practicing entertainment attorney. “Look under our sleeve, take the extra time. If you’re going to close this deal, we want to know you’re firmly grounded in this decision versus buyer’s remorse. It speaks volumes of Netflix’s confidence, but also maybe a little bit of their ambivalence. If you don’t want to do the deals, it’s all good, we’ve got billions to spend elsewhere.”

Netflix is offering to acquire WBD’s film and TV studio and the HBO Max streaming service (and TCM!), while WBD spins off its cable assets like CNN, TNT, and TBS that Netflix doesn’t want. Paramount is offering to buy all of WBD, including the cable assets, and it’s offering more money to make that happen, which is why there’s been so much media attention over whether Paramount’s offer is superior.

King though would argue that Paramount, in all of its bids, has never actually beaten Netflix’s deal. While there’s a whole lot of uncertainty around whether Jared Kushner or Saudi Arabia are involved in the funding that have also weighed into how good its offer is, King also explains that if you look at the value of the spun-off cable assets on their own, that plus what Netflix is offering for just the film assets is still below what Paramount is offering for the whole thing. He adds that the major investing firms that would be voting on the WBD deal tend to agree with him, and they would love to get their hands on some Netflix stock. Paramount might even be the one to wind up with CNN, TNT, and the like when that spin is all said and done, but it might need to pay a separate premium in order to obtain it.

“This is just a really interesting saga in how it has unfolded,” King said. “It’s not super unusual to have complicated, messy mergers and acquisitions. But this is the most messy I’ve seen recently, particularly where Paramount’s never actually made a competitive bid against Netflix.”

Though we have the shareholder vote arriving next month, WBD won’t complete its spin for 5-8 months, and it has given a timeline of 12-18 months for the Netflix deal to be complete from when it was first signed back on December 4, 2025, so we still have a long way to go.

But beyond sheer dollars and cents, there’s no right answer as to which side will be better for Hollywood. Hamilton explains that the anti-Netflix crowd thinks it will stifle the theatrical business and be worse for consumers in terms of streaming consolidation. And the anti-Paramount side might result in more layoffs because of merging two companies with a lot of overlap. And while it might give the legacy media channels another chance to stay intact and compete, this is already the failed vision that is leading to WBD selling again in the first place. There’s a lot of noise, but Hamilton believes voters can’t ignore taking all of it into consideration.

“Because this deal is so politically charged, I don’t think they can look at it with anything other than that context in mind,” Hamilton said. “It’s more than just the money. It’s more about, what is five years down the line? How is this going to unfold?”