Netflix is reportedly preparing a revised, all-cash offer to acquire Warner Bros. Discovery’s streaming and studios businesses, according to sources cited by the Wall Street Journal. This new proposal follows earlier reports from Bloomberg News suggesting Netflix was considering such a move. Previously, Netflix’s initial agreement stipulated that each Warner Bros. Discovery shareholder would receive $23.25 in cash and $4.50 worth of Netflix common stock (or 0.0460 Netflix shares if the stock price fell below a certain collar) for each share of WBD common stock. This original deal had an enterprise value estimated at $82.7 billion.

The shift to an all-cash offer comes amid an aggressive push from David Ellison’s Paramount Skydance, which has been vigorously advocating for its own $30 per share all-cash hostile bid for the *entire* Warner Bros. Discovery entity. Paramount Skydance has taken concrete steps to press its case, including filing a lawsuit on Monday. This lawsuit seeks to compel WBD to disclose crucial financial details of the Netflix deal, particularly how WBD is valuing the proposed Discovery Global cable TV networks spin-off, which Paramount Skydance alleges would be worthless based on its analysis comparing it to Comcast’s recent Versant spin-off.

Furthermore, Paramount has officially declared its intention to launch a proxy fight. This move involves nominating its own WBD board candidates for election at Warner Bros. Discovery’s annual shareholder meeting, with these candidates expected to back the Paramount bid. The competition for WBD has intensified as Netflix’s stock performance has affected its initial offer’s perceived value. Shares of Netflix have dropped more than 12% since the Warner Bros. deal was announced on December 5, falling below the $97.91 per share ‘collar’ outlined in the WBD agreement. This decline would reduce the total value of the acquisition for WBD shareholders; Paramount’s analysis from January 8 estimated the total value of the Netflix transaction to WBD shareholders at $27.42 per share, given the drop in Netflix’s share price. Netflix’s stock closed at $90.32 per share on Tuesday, up 1% for the day.

Under Netflix’s original deal with WBD, the streaming giant aimed to acquire specific assets including the Warner Bros. film and television studios, HBO and HBO Max, and its games division. This initial bid was backed by $59 billion in debt financing from Wells Fargo, BNP, and HSBC. In contrast, Paramount Skydance’s offer is to buy Warner Bros. Discovery in its entirety, with significant financial backing from David Ellison’s father, Oracle co-founder Larry Ellison, as well as other partners such as RedBird Capital Partners and the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi.

These complex developments are being closely watched in the media industry. For instance, the “Daily Variety” podcast recently featured Variety’s Todd Spangler explaining the latest intricacies of Paramount Skydance’s pursuit of Warner Bros. Discovery, specifically detailing the lawsuit filed in Delaware. Separately, on the same podcast, Joe Otterson took the pulse of WWE viewership and fandom, a year after the wrestling franchise transitioned its streaming home to Netflix, highlighting Netflix's broader strategy in content acquisition and distribution.