Paramount Skydance Corporation reported a wider-than-expected fourth-quarter loss of $573 million, a significant increase from the $224 million loss reported in the same period last year, despite a 2% rise in overall revenue. The financial results, released Tuesday, approach as the media conglomerate intensifies its pursuit of Warner Bros. Discovery, currently engaged in a bidding war with Netflix.
The loss was attributed to declines in television advertising and distribution revenue, even as Paramount saw gains in its streaming and film divisions. The company did not immediately detail the specific figures for those gains. Paramount Skydance’s revised bid for Warner Bros. Discovery reached $31 per share, according to a statement released by Warner Bros. Discovery on Tuesday. This latest offer surpasses Netflix’s original agreement to acquire Warner Bros. Discovery for $27.75 per share, or $82.7 billion.
Warner Bros. Discovery’s board of directors is now evaluating the Paramount Skydance offer to determine if it constitutes a “Company Superior Proposal” as defined in its existing merger agreement with Netflix. If the board deems the Paramount Skydance bid superior, Netflix would have four days to revise its offer, according to the terms of the agreement.
Paramount Skydance’s revised proposal includes a $7 billion termination fee should the deal fail to secure regulatory approval, and would also cover the $2.8 billion termination fee Warner Bros. Discovery would be required to pay if it terminates its agreement with Netflix. The increased bid follows a week of resumed talks between the companies, addressing concerns that previously led Warner Bros. Discovery to favor Netflix’s offer.
Despite the ongoing negotiations, Warner Bros. Discovery affirmed that its merger agreement with Netflix remains in effect and that its board continues to recommend the deal. Paramount Skydance, however, maintains that its bid represents a more favorable financial outcome for Warner Bros. Discovery shareholders and argues that its acquisition is less likely to face antitrust challenges than Netflix’s.
The bidding war for Warner Bros. Discovery, which owns assets including HBO Max, CNN, Food Network, HGTV, TBS, and TNT, has escalated in recent weeks. Paramount Skydance CEO David Ellison believes the company has a stronger path to U.S. Regulatory approval due to its connections, though this claim has not been independently verified. As of Tuesday’s close, Netflix shares were up more than 2%, Warner Bros. Discovery gained 0.8%, and Paramount fell 1.6%.
Warner Bros. Discovery will continue to engage with Paramount Skydance to assess the viability of a superior proposal, while Netflix awaits the outcome of the board’s evaluation.
