Main argument Paramount Skydance's hostile takeover bid For Warner Bros. Discovery Here's the thing: WBD cable networks like CNN and TBS aren't worth as much as David Zaslav's company's deal with Netflix suggests, Paramount claims.
It is difficult to make a complete comparison between the two proposals. But here's how it works, according to Paramount. Most recent $30/share offer from Paramount Skydance (all cash) is for the entire company, including its television business (equity value: $77.9 billion). Netflix agreement with WBD at $27.75 per share (84% cash) covers Warner Bros.' television and film studios, as well as HBO, HBO Max and gaming (equity value: $72 billion), excluding non-HBO television networks.
Since Warner Bros. Discovery accepted the terms of the Netflix deal and rejected Paramount's offer, suggesting that WBD's board of directors concluded that Netflix's offer was in the best interests of Warner Bros. and its shareholders, meaning Netflix's bid was worth more than Paramount's bid.
This would mean WBD ascribes a value of at least $2.25 per share to the TV network group, which will be called Discovery Global and will be spun off in the third quarter of 2026 ahead of the proposed Netflix deal. But Paramount says the value of network group WBD is actually much lower: about $1 a share, equating to a capital valuation of about $2.6 billion.
“Even after determining the value of the global network plugin, the total value to WBD shareholders in the Netflix deal is no more than $30 per share, and ours is 100% cash,” Ellison told investors on a call Monday. “The Netflix deal is going away. [Warner Bros. Discovery] highly leveraged shareholders and a shrinking global network, creating value uncertainty.”
“The Netflix offer leaves shareholders with a stake in the debt-ridden WBD Global Networks business,” Ellison added. “How does the WBD estimate the value of this capital?”
Warner Bros. Discovery did not respond to a request for comment.
WBD has not disclosed how it evaluates the proposed Discovery Global spinoff, “despite its implications for the economics of Netflix's offering,” Andy Gordon, Paramount's chief strategy officer and chief operating officer, said during a conference call Monday.
Here's the additional math laid out by Gordon: For Netflix's offer to beat Paramount's $30 cash offer, the World Bank's Global Networks group would need to trade at more than five times forward EBITDA (earnings before interest, taxes, depreciation and amortization)—higher than Wall Street analysts' consensus estimate that Global Networks would be worth 4.5 times forward EBITDA. Financial analysts rate WBD Global Networks' closest competitor highly. Versant is an entity that Comcast spun off from NBCUniversal. — at 4x-5x forward EBITDA.
Under WBD's agreement with Netflix, Netflix will assume Warner Bros. debt. Discovery at $10.7 billion. This implies that Discovery Global will take on more than $23 billion of WBD's debt load (which stood at $34.5 billion in gross debt at the end of the third quarter).
Since WBD Global Networks is expected to have a net debt to EBITDA ratio of 3.5x and an enterprise value ratio of 4.5x, Gordon said, “we can assume that the value of the business to shareholders is less than 1x, or approximately $1 per share.” Versant is expected to have a lower leverage ratio than WBD Networks, he said; With an expected net debt to EBITDA ratio of 1.25x, Versant is expected to have EBITDA of 3x.
But if WBD's television assets are in “decline,” why does Paramount need them? Ellison said this during a phone conversation: “One of the reasons why we are so interested in [the Warner Bros. Discovery television business] and want to acquire it because when you combine it with our line business, there are significant synergies.”
Gordon added that Paramount executives believe that “we can really do a really good job on the potential synergies that we've talked about and help this group of customers, and we now have confidence that we own [Paramount’s TV business] a little bit and understand what we can do with these brands. And let's be clear, [Warner Bros. Discovery] Global Networks has some really great brands.”
In June 2025, WBD announced plans to split its streaming and studio businesses (under the Warner Bros. brand, led by Zaslav) and television network group (as Discovery Global, led by current WBD CFO Gunnar Wiedenfels) into two separate public companies. Discovery Global will include cable networks CNN, TBS, TNT, Discovery Channel, HGTV, Food Network, OWN, TLC, Magnolia Network and Travel Channel; TNT Sports in the USA; free channels in Europe; and digital products including Discovery+ and Bleacher Report.
The Discovery Global split is expected to be completed in the third quarter of 2026, before the Netflix deal closes – unless Paramount's rival Skydance bid prevails.
