Paramount doubles WBD breakup fee to $5 billion
Paramount doubles WBD breakup fee to $5 billion
Paramount’s offer to pay billions if an agreement between itself and Warner Bros. Discovery is quashed is a sign that it thinks any deal would go through.
Is there a sense of desperation in the air at Paramount Skydance? Most industry analysts expected Paramount to have the inside track in acquiring Warner Bros. Discovery, if nothing else, because of the cozy relationship between Paramount’s ownership and the Trump administration. But as the bidding process has gone along, Paramount has faced stiff competition from Netflix and Comcast, and a new report indicates that it has taken a big step to try and increase WBD’s confidence that its own bid would pass muster with regulators if it were chosen.
Key Details:
- Can’t quit you: Paramount has raised its proposed breakup fee offer with WBD to $5 billion.
- Through the grapevine: If Netflix is chosen by WBD, Paramount may go directly to WBD shareholders to lobby for their offer.
- Still mulling: WBD is still going through the latest round of bids for its assets.
As reported by Bloomberg, Paramount has increased the proposed breakup fee it’s offering to WBD from $2.1 billion to $5 billion. That total would be given to WBD by Paramount if the two sides agree to a merger deal that is eventually nixed by regulators.
The increase is an attempt by Paramount to show confidence that if it were to agree to a deal with WBD, it would not face any trouble getting the deal approved. Most analysts already believe that because of the cozy relationship between President Trump and Paramount CEO David Ellison’s father, Larry, a regulatory process that is supposed to be independent would be heavily tilted in Paramount’s favor if it submits the winning bid.
Paramount has a backup plan in case Netflix or Comcast is chosen as the winner instead. All three companies have entered a new round of bidding for WBD, but per the New York Post Paramount plans to go directly to WBD shareholders to argue that their offer is the only one that stands a chance to be approved.
There are growing concerns about President Trump’s relationship with Paramount Skydance and its CBS News division in Congress. According to The Hill, Representative Jamie Raskin (D-MD) recently sent a letter to CBS News ombudsperson Ken Weinstein which stated that President Trump wielded “improper influence…over CBS News’s editorial decisions” in recent weeks. That influence extended to an interview with the president that aired on “60 Minutes” on Nov. 2.
WBD is still mulling the offers it has received for its assets, but could make a decision on which bid it prefers by the end of this week. The company would ideally like to have the winning bid selected by the end of 2025.
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