Netflix vs. Paramount: Round 3 – The "Billionaire" Backup

The update: The billionaire steps in

If you thought the battle for Warner Bros. Discovery (WBD) was over after the Board rejected the cash offer last week, you were wrong. On Monday, December 22, Paramount made a move that changed the math entirely. They didn't just tweak their offer; they brought in the heavy artillery.

Larry Ellison, the founder of Oracle and one of the richest men in the world, has signed an irrevocable personal guarantee for $40.4 billion of the financing. This is a game changer. It effectively replaces a "trust fund" promise with a direct commitment from a man worth over $200 billion.

Addressing the funding gap

In my last update, I explained that the WBD Board rejected the $30.00 cash offer because they claimed the funding was "illusory." Their main argument was that the money came from a family trust that could technically be revoked.

That operational loophole is now closed. With Larry Ellison’s personal signature on the deal, the Board can no longer claim the capital isn't real. This removes the primary justification they used to turn down the cash premium.

Matching the safety net

The financing wasn't the only gap Paramount closed. They also agreed to increase the "Reverse Termination Fee" to $5.8 billion. This matches the exact amount Netflix promised to pay if regulators block the deal.

From a deal structure perspective, this achieves parity. Paramount has now secured a personal guarantee for the funding and matched Netflix’s regulatory insurance policy. The two biggest risks the Board warned shareholders about, funding certainty and regulatory protection, have been effectively neutralized.

The new standoff: It comes down to price

With the structural issues resolved, the market signals suggest a shift in sentiment. WBD stock is now trading above the Netflix offer price, indicating that investors no longer view the Netflix deal as a foregone conclusion. It doesn't mean Netflix is out of the race, but the premium suggests the market is pricing in a real possibility that the Paramount bid, or perhaps a sweetened counter-offer, could prevail.

However, the fight isn't over yet. Harris Associates, the investment firm managing the Oakmark Funds, made a critical public statement this week. They are a top-5 shareholder controlling nearly 4% of WBD stock so their vote carries immense weight.

Alex Fitch, a portfolio manager at Harris Associates, signaled that while Paramount's structural fixes were "necessary," they are "not sufficient."

This is the pivot point from "Structure" to "Price." Harris Associates is effectively telling David Ellison that fixing the paperwork isn't enough. If he wants their 96 million votes, he needs to pay more. They are holding the door open, but they expect a higher number than $30.00 to walk through it.

The timeline: January 21

Paramount has extended the deadline for shareholders to sell their shares to January 21, 2026. This gives the WBD Board two extra weeks to make a decision. With the funding now secure and the break-up fee matched, their ability to simply reject the offer on technical grounds has become much more difficult. We are now watching to see if they hold the line or if this pressure forces a new round of negotiations.

The bottom line

Paramount has now addressed the Board's stated objections. The funding is backed by Larry Ellison's personal guarantee, and the break-up fee matches Netflix's protection. The structural concerns have been resolved.

But Harris Associates' statement makes it clear: fixing the paperwork isn't enough. This has shifted from a debate about deal structure to a negotiation about price.

Why this is my last update (For now)

Here's the reality: this situation is changing almost daily. At this point, continuing to provide updates would just be tracking noise rather than meaningful developments.

The framework is set. Paramount has the funding, Netflix has the structural regulatory path, and major shareholders have signaled they want more money. What happens next whether Ellison raises his bid, how Netflix responds, what the Board ultimately decides are variables that will play out over the coming weeks.

Unless something fundamentally changes the deal structure again, this is where I'm closing my coverage of this saga. Not because the story is over, but because we've reached the point where the next moves are negotiation tactics rather than strategic shifts worth analyzing.

The January 21 deadline is approaching. We'll see who blinks first.