A growing split among Warner Bros. Discovery’s largest shareholders is complicating the outcome of one of the most closely watched media takeovers in years. While Paramount Skydance has returned with a sweetened $30-per-share offer valuing Warner Bros. Discovery at $108.4 billion, the company’s board continues to back its lower-priced agreement with Netflix, arguing that deal certainty and balance-sheet discipline outweigh headline valuation. The standoff highlights how, in today’s leveraged media landscape, not all premiums are created equal.

Competing Offers, Competing Risk Profiles

At the center of the debate is the contrast between Paramount’s all-cash proposal and Netflix’s agreed $27.75-per-share transaction, valuing Warner Bros. at roughly $82.7 billion. Paramount’s offer appears superior on price alone, but Warner Bros. has warned that switching deals would trigger significant costs, including a $2.8 billion breakup fee owed to Netflix, $1.5 billion in banking fees, and roughly $350 million in financing expenses.

More critically, Warner Bros. says Paramount’s bid would saddle the combined company with approximately $87 billion in debt, a figure that raises concerns about long-term flexibility in an industry already grappling with high content spending and slowing streaming growth. By contrast, Netflix’s bid is backed by what the board describes as more secure financing and a cleaner post-merger balance sheet.

Institutional Holders Take Sides

Major shareholders are far from unanimous. Harris Oakmark, Warner Bros.’ fifth-largest investor with roughly 4% ownership, supports the board’s stance. Portfolio manager Alex Fitch said the Paramount offer does not clearly exceed the value of the Netflix deal once fees and leverage are considered, arguing that “a tie goes to the incumbent.”

Smaller holders echo that view. Yussef Gheriani of IHT Wealth Management said the incremental value of Paramount’s offer may not justify the additional borrowing and transaction costs, reinforcing concerns that financial engineering could erode shareholder returns.

Others disagree sharply. Pentwater Capital Management, which owns more than 50 million shares, has accused the board of breaching its fiduciary duty by dismissing Paramount’s bid too quickly. Founder Matthew Halbower has warned that if Paramount improves its proposal and the board refuses to engage, Pentwater may oppose current directors at the next election.

Simplicity Versus Strategic Certainty

Some investors favor Paramount’s bid precisely because of its simplicity. Mario Gabelli, whose funds hold about 5.7 million Warner Bros. shares, has said he is likely to tender his stake to Paramount, citing the appeal of an all-cash transaction and a potentially faster regulatory path. In his view, Netflix must further simplify its offer to remain competitive.

The division underscores a broader tension in media dealmaking: whether certainty and lower leverage should trump immediate price maximization. With regulators increasingly scrutinizing large technology and media combinations, boards are weighing not just valuation but execution risk, financing durability, and the ability to sustain investment in premium content.

A Rare Asset, A Narrow Window

Warner Bros.’ vast library — spanning HBO, DC Comics, Harry Potter, and the HBO Max streaming platform — makes it a rare prize. With shareholders facing a Jan. 21 deadline to accept Paramount’s offer, the coming days may determine whether Paramount can bridge the credibility gap or whether Netflix’s steadier proposal prevails.

For investors, the decision reflects a deeper question shaping the media sector: in an era of high debt and intensifying competition, is the highest bid truly the best outcome?