The “U-turn” that has dominated business headlines on February 16, 2026, is the dramatic change of heart by the Warner Bros. Discovery board of directors, who are now officially reconsidering the $108 billion takeover bid by media giants Paramount Global and Skydance Media.
For months now, the WBD board of directors has remained committed to the $72 billion “friendly” asset swap proposal offered by Netflix. Under the proposal, Netflix would buy the premium crown jewels of Warner Bros. Discovery, consisting of HBO, DC Studios, and Warner Bros. Pictures, while the legacy cable assets, such as CNN and TNT, would be spun off into a separate entity that would be named “Discovery Global.” The $108 billion acquisition proposal made by Paramount Global and Skydance Media would instead allow the acquirer to buy the entire Warner Bros. Discovery entity.
Why it’s being called a U-Turn
For months now, the WBD board of directors has remained committed to the $72 billion asset swap proposal offered by Netflix while rebuffing the $108 billion acquisition proposal made by the Paramount Global-Skydance Media consortium. The dramatic change of heart was prompted by the “aggressive financial sweeteners” offered by Skydance CEO David Ellison, who is the son of co-founder Larry Ellison.
- $2.8 Billion Breakup Coverage: Paramount has agreed to pay the termination fees that Warner Bros. Discovery would have had to pay if the firm had called off the $72 billion asset swap proposal with Netflix.
- Quarterly “Ticking Fee”: A $0.25 per-share quarterly payment (totaling about $650 million) in case regulatory delays hold up closing.
- Debt Refinancing: An agreement to support and refinance WBD’s $15 billion debt. This is a large liability left unresolved in the Netflix deal structure.
Shareholders Ancora and Pentwater are openly blasting WBD’s board for favoring a lower per-share offer by Netflix ($27.75) over an all-cash offer by Paramount of $30. The move by activist investors seems to be having an effect on WBD’s board.
Under the merger deal with Netflix, WBD must notify them of “a right to match” any better offer. This sets the stage for a final showdown in what promises to be a bidding war.
According to industry experts, it’s ironic that a combined Paramount Pictures and WBD will bring under one roof Yellowstone and House of the Dragon. The deal will be the largest merger in media history if it goes through. The combined entity will be able to compete with The Walt Disney Company. It seems we are at an important juncture in this battle.
