AEW and Warner Bros Discovery have made a fine pair, even though the latter has seen a lot of changes in recent memory. Now we have a new update to WBD’s continued saga.
WBD announced that its Board of Directors has unanimously recommended shareholders reject the amended tender offer from Paramount Skydance. The board says the offer is not better than its existing merger agreement with Netflix that could threaten AEW’s place with WBD. This comes after weeks of maneuvering.
On December 8, it was announced that Netflix would acquire WBD’s studio operations and HBO Max in a deal valued at $72 billion, with an enterprise value of $82.7 billion. Paramount Skydance responded by launching a $108 billion hostile takeover bid aimed at derailing that agreement. Paramount later amended its offer on December 22. WBD was not persuaded.
In a statement released by the WBD, the board made its position clear. They are not going with Paramount’s bid.
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“The Board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas.”
Board Chair Samuel A. Di Piazza Jr. expanded on that decision. Paramount’s offer simply isn’t enough to get them to drop the Netflix option.
“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”
The board followed up with a detailed letter to shareholders explaining why it believes the Paramount Skydance offer falls short.
“Your Board unanimously determined that the PSKY amended offer remains inadequate, particularly given the insufficient value it would provide, the lack of certainty in PSKY’s ability to complete the offer and the risks and costs borne by WBD shareholders should PSKY fail to complete the offer.”
Under the Netflix deal, WBD shareholders would receive $23.25 in cash, Netflix stock valued at $4.50, and ownership in Discovery Global. The board says that structure offers future upside without forcing WBD to absorb new penalties or debt exposure.
On the other hand, abandoning the Netflix deal would trigger major costs. WBD would owe Netflix a $2.8 billion termination fee. It would face another $1.5 billion tied to a failed debt exchange. Interest expenses would rise by roughly $350 million. In total, the board estimates a $4.7 billion hit, or $1.79 per share.
The Paramount Skydance proposal also relies heavily on debt. According to WBD, PSKY would need close to $95 billion in financing to complete the acquisition. That would make it the largest leveraged buyout in history. The board warned that this structure increases the risk of lenders walking away, delays stretching 12 to 18 months, or the deal collapsing altogether.
If that happens, WBD shareholders would be left holding stock in a company that spent over a year restricted from making key business moves.
“If the PSKY offer fails to close, WBD shareholders would be left with shares in a business that has been restricted from pursuing its key initiatives for up to 18 months.”
The board also emphasized the difference in financial footing between the two bidders. Netflix carries an investment-grade balance sheet, strong free cash flow, and far fewer conditions between signing and closing. Paramount Skydance does not.
“Given these factors, the Board determined that the Netflix merger remains superior to PSKY’s amended offer.”
WBD has had a long-standing relationship with All Elite Wrestling, dating back to 2019 when AEW launched on TNT. Since then, AEW programming has expanded across TNT and TBS, anchored by Dynamite, Rampage, and Collision. So, pro wrestling fans will certainly be interested in this news.
AEW has become one of WBD’s most consistent live sports-style properties. Tony Khan’s company delivers weekly live content, steady cable ratings, and a younger demographic that traditional scripted programming struggles to reach. That younger demographic is treasured, for sure.
The partnership between AEW and WBD has survived executive turnover, rebrands, and the merger that formed Warner Bros. Discovery itself. Now we will have to see what the future holds.
WBD and AEW have been close when it comes to talks by renewing its media rights since Dynamite’s premiere episode. AEW content has also been positioned as valuable shoulder programming for streaming and digital distribution as well, especially with the MAX streaming platform in the mix.
A stable ownership and distribution partner has been very important to AEW’s growth. After all, the company wouldn’t be able to offer fans, or their stars, this kind of entertainment if WBD wasn’t in the picture. The Netflix merger may still happen, and that might be very interesting.
From WBD’s perspective, avoiding disruption is key. The board closed its letter with a clear message.
“Your Board negotiated a merger with Netflix that maximizes value while mitigating downside risks, and we unanimously believe the Netflix merger is in your best interest.”
For now, WBD is betting on certainty. It’s asking shareholders to do the same. We will keep a close eye on this story for any updates. You never know what will break next in the pro wrestling world, especially since it stretches to every corner of the entertainment landscape.
What’s your take on WBD and AEW’s future together? Do you think that AEW will stay on TNT and TBS forever? Let us know what you think in the comments section!