Hollywood is basically eating itself. If you’ve been following the chaotic back-and-forth involving the Warner Bros. Discovery Paramount deal, you know it’s been a wild ride. Honestly, it feels less like a corporate merger and more like a high-stakes poker game where everyone is bluffing and the chips are made of classic movie franchises and cable networks that are slowly losing air.
Just a few days ago, on January 12, 2026, things went from messy to nuclear. Paramount Skydance, led by David Ellison, officially sued Warner Bros. Discovery (WBD) in Delaware. They’re claiming David Zaslav and the WBD board are essentially "ghosting" a better offer to stick with a deal they already made with Netflix.
It’s personal now.
The $108 Billion Hostile Takeover Attempt
The numbers are genuinely staggering. Paramount Skydance is currently dangling a $108.4 billion all-cash carrot in front of WBD shareholders. They want the whole thing—the Harry Potter wands, the DC capes, and even the "Global Networks" side of the business (think CNN and Discovery) that everyone else seems to want to spin off.
Paramount is offering $30.00 per share.
On the other side, you have Netflix. They’ve already got a signed agreement to buy WBD’s "crown jewels"—the studios and HBO/Max—for about $82.7 billion. That breaks down to $27.75 a share, paid in a mix of cash and Netflix stock.
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WBD’s board keeps saying "no thanks" to Paramount. Why? Because they think the Paramount deal is a financial house of cards. They’ve called it the "largest LBO in history," claiming it would saddle the new company with a terrifying $87 billion in debt.
Why the WBD Board is Terrified of Paramount’s Money
It’s kinda simple when you look at the leverage. Paramount Skydance is a $14 billion company trying to swallow a giant nearly ten times its size. To make it work, they’re leaning on a $40.4 billion personal guarantee from David Ellison’s father—Oracle founder and tech billionaire Larry Ellison.
- The Debt Problem: WBD argues that the $54 billion in new debt required for the Paramount deal creates a "heightened risk of failure to close."
- The Breakup Fees: If WBD dumps Netflix for Paramount, they have to pay Netflix a $2.8 billion "oops, sorry" fee.
- The Hidden Costs: Between the Netflix fee and other financing penalties, WBD estimates it would cost them $4.7 billion just to switch partners.
Essentially, WBD is arguing that a bird in the hand (Netflix) is worth more than a very expensive, debt-heavy bird in the bush (Paramount).
The Netflix Factor: A Different Kind of Merger
The Netflix deal is weird because it’s not for the entire company. If it goes through, WBD would spin off its cable networks like CNN, HGTV, and Food Network into a separate entity called "Discovery Global" by Q3 2026.
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Netflix gets the prestige stuff. The WBD board loves this because it’s "cleaner." They get to offload the declining cable assets and let Netflix—the king of streaming—take over the content engine.
But David Ellison isn't going away. He’s already announced plans to nominate his own slate of directors to the WBD board at the 2026 annual meeting. It’s a classic proxy fight. He’s basically saying, "If the current board won't take my $30 a share, I’ll find a board that will."
What Most People Get Wrong About the Deal
You’ll hear a lot of talk about "regulatory hurdles." While the DOJ and FTC are always a concern, the real hurdle here is the balance sheet.
Most analysts, including folks at Yale and Wharton, are skeptical of Paramount’s ability to survive that much debt. If the deal closes and then the company collapses under the weight of its interest payments, the WBD shareholders are the ones who lose everything. That’s the "risk" the board keeps shouting about in their press releases.
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Is This the End of Paramount as We Know It?
It's a strange time. Remember, Paramount Global only recently became Paramount Skydance in August 2025. David Ellison won that battle after a long, public tug-of-war with Shari Redstone. Now, he’s trying to double down immediately by grabbing WBD.
If he fails, Paramount is still a major player, but it’s a player with a lot of pressure to prove that the original Skydance merger was worth it. If he wins, he becomes the most powerful man in Hollywood, controlling a combined library that would dwarf almost everyone else.
Actionable Insights for the Next Few Months
If you're an investor or just a fan of these brands, keep an eye on these specific dates:
- January 21, 2026: This is when Paramount’s current tender offer is set to expire. Look for them to either extend it or "sweeten" the pot even further.
- The Delaware Court Ruling: The lawsuit filed by Paramount is designed to force WBD to open their books. If the court agrees, we might see exactly how much debt Netflix is asking WBD to carry in that separate spin-off.
- Proxy Nominations: Watch for the names Ellison puts forward for the board. If he gets high-profile, respected industry vets, the current board will start feeling the heat from institutional investors.
This isn't just about business; it's about who gets to tell the stories we watch for the next twenty years. Right now, the Warner Bros. Discovery Paramount deal is a game of chicken where nobody wants to blink first. WBD is betting on the stability of Netflix, while Paramount is betting that shareholders won't be able to resist a big, fat check—no matter where the money comes from.