Netflix Grants Waiver for WBD to Reopen Paramount Skydance Talks

NEW YORK (Azat TV) – Warner Bros. Discovery (WBD) has filed its definitive proxy statement and scheduled a special meeting for March 20, 2026, for stockholders to approve its proposed transaction with Netflix. However, in a significant turn of events, Netflix, Inc. unexpectedly granted WBD a narrow seven-day waiver on Tuesday, allowing the media conglomerate to reopen deal talks with rival bidder Paramount Skydance (PSKY).

This development introduces a new layer of complexity and uncertainty into the highly anticipated merger, as WBD explores a potentially higher offer from Paramount Skydance, which has hinted at a $31 per share bid, up from its previous hostile offer of $30 per share. The Netflix deal, an all-cash transaction, stands at $27.75 per WBD share.

Netflix’s Strategic Waiver and Renewed Bidding War

The decision by Netflix to grant the waiver comes despite its public confidence in its own ‘superior offer’ and a ‘clear path to timely regulatory approval.’ According to CNBC, Warner Bros. Discovery confirmed it would re-engage with Paramount Skydance to address ‘deficiencies’ in PSKY’s prior proposals. David Zaslav, CEO of Warner Bros. Discovery, stated that the company’s ‘sole focus has been on maximizing value and certainty for WBD shareholders,’ indicating a willingness to consider all options.

Netflix, in its statement, acknowledged the ‘ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics.’ While reiterating its belief that its transaction provides superior value and certainty, the waiver allows WBD to fully and finally resolve the matter with PSKY. This move has injected renewed volatility into the market, with both WBD and Netflix shares reportedly up approximately 3% in premarket trading following the news.

Regulatory Hurdles and Financial Risks of Competing Bids

Netflix has aggressively positioned its transaction as a largely vertical merger of complementary assets, asserting it has a straightforward route to regulatory clearance from authorities such as the Hart-Scott-Rodino (HSR) regulators, the Department of Justice (DOJ), the European Commission, and the Competition and Markets Authority (CMA). Netflix also pointed out that it received German Foreign Direct Investment (FDI) clearance on the same day PSKY did, countering PSKY’s claims of regulatory certainty.

Conversely, Netflix has launched strong criticisms against the Paramount Skydance proposal, highlighting what it describes as significant horizontal overlaps that would combine two of the five major Hollywood studios, two major theatrical distribution channels, two major TV studios, two major news networks, and two major sports distributors. Netflix argues these overlaps would raise serious antitrust concerns globally. Furthermore, Netflix raised national security concerns regarding the foreign funding behind PSKY’s bid, suggesting scrutiny from government reviewers globally, including CFIUS and Team Telecom in the U.S., would be intense.

Beyond regulatory issues, Netflix has also pointed to the financial risks associated with PSKY’s bid. Netflix claims that PSKY’s proposed post-merger structure would be ‘over-leveraged with approximately $84 billion of total proforma debt’ and an estimated ~7x leverage ratio. Netflix asserted that PSKY’s aggressive deleveraging plans, which would require an estimated $16 billion in cost savings—far exceeding publicly communicated synergy figures—could only be achieved through ‘unprecedented job cuts’ that would ‘irreparably harm the entertainment industry.’ Netflix contrasted this with its own ‘strong cash flow generation’ supporting an all-cash transaction while preserving a healthy balance sheet.

The Path Ahead for WBD Stockholders

With the special meeting set for March 20, 2026, WBD stockholders now face a critical decision amidst a rekindled bidding war. The WBD board has reaffirmed its recommendation for the Netflix transaction, emphasizing it as the only signed, board-recommended agreement. However, the seven-day waiver provides a window for PSKY to formalize its hinted $31 per share offer, potentially forcing WBD stockholders to weigh a higher cash offer against the regulatory and financial stability arguments put forth by Netflix.

The unexpected waiver granted by Netflix indicates a strategic maneuver to either definitively close the bidding process or to ensure maximum value for WBD shareholders, even if it introduces temporary uncertainty into the Netflix merger. This move underscores the high stakes and intense competition defining the consolidation efforts within the global entertainment industry.