Paramount Reportedly Offering $5 Billion Breakup Fee If WBD Acquisition Fails to Close
December 3, 2025
Paramount Skydance has upped the stakes exponentially in the mega-billion dollar auction for Warner Bros. Discovery.
The media giant has reportedly agreed to up the amount of money it would pay WBD should its successful all-cash acquisition bid fail to reach the finish line from $2.1 billion to $5 billion, according to Bloomberg, which cited sources familiar with the situation.
A breakup fee, also referred to as a termination fee, is a penalty that is typically paid in mergers and acquisitions transactions if the seller backs out of the deal. The fee serves to compensate the purchaser for the time and resources spent in negotiating the deal.
In this situation, however, the fee would be paid by the buyer (Paramount).
Paramount’s confidence to consummate a deal is based in part on the deep financial pockets of CEO David Ellison’s father, Oracle founder Larry Ellison, and his close ties to President Trump.
The Trump Administration’s FCC and DOJ, among other agencies, are expected to weigh in on the federal regulatory process — a significant hurdle since some of Paramount’s offer reportedly involves foreign funding from three Middle Eastern sovereign wealth funds.
Trump this year inked lucrative deals with Saudi Arabia, Qatar and United Arab Emirates — the three sources of the Middle Eastern funding.
The senior Ellison largely bankrolled Skydance Media’s $8 billion acquisition of the former Paramount Global.
Netflix is reportedly offering a “mostly” all-cash offer for WBD’s streaming and studio assets, while Comcast, which is also only interested in streaming and studio assets, said it would meld the studio and streaming businesses with NBCUniversal.
Paramount and Comcast have separately offered WBD CEO David Zaslav senior executive positions in the new company.
Warner Bros Discovery, which is exploring an asset sale ahead of a planned spin-off of its studio, streaming and television assets, is expected to make a final decision by Christmas.