Netflix Welcomes Warner Bros. Discovery Board Recommendation

Core Viewpoint - The Warner Bros. Discovery (WBD) Board recommends stockholders approve the merger agreement with Netflix, viewing it as the best option for long-term value, while urging rejection of the unsolicited offer from Paramount Skydance Corporation (PSKY) [1][2][5] Financial Details - The merger agreement values the transaction at $27.75 per WBD share, totaling an enterprise value of approximately $82.7 billion, with an equity value of $72.0 billion [2][6] - WBD stockholders will receive $23.25 per share in cash and $4.50 per share in Netflix stock, along with additional value from the separation of WBD's Global Linear Networks business, Discovery Global, planned for Q3 2026 [7][2] Strategic Rationale - The merger is positioned as pro-consumer, pro-innovation, and pro-growth, enhancing value for both stockholders and consumers [3][19] - Netflix aims to leverage Warner Bros.' theatrical film division, television studio, and HBO brand to strengthen its content offerings and expand its global reach [3][19][20] Market Position - Netflix currently holds a 8.0% share in U.S. TV viewership, while a combined Netflix-HBO/HBO Max would increase this to 9.2%, still trailing behind YouTube and Disney [12][13] - The competitive landscape is highlighted, with Netflix and Warner Bros. complementing each other, providing opportunities for creators and enhancing the overall entertainment industry [19][20] Operational Commitments - Netflix commits to maintaining traditional theatrical releases for Warner Bros. films, ensuring a focus on prestige television and high-quality storytelling [21][22] - The merger is expected to create more opportunities for creators and enhance the production capabilities of both companies, with a focus on original programming [20][19]