Warner Bros. Discovery (WBD) rejected Paramount Global's revised $108.4 billion acquisition bid, deeming it a "leveraged buyout" that would burden the company with $87 billion in debt, according to a statement released Wednesday. WBD's board of directors unanimously rejected the offer and urged shareholders to do the same in a letter, citing concerns that the high level of debt required by Paramount would increase the risk of the deal collapsing.

The letter recommended shareholders approve WBD's earlier $82.7 billion deal with Netflix for its film and TV studio assets. This deal, according to WBD, presents a more stable financial outlook.

Paramount had initially approached WBD shareholders directly with an all-cash offer of $30 per share in early December, after the Warner Bros. board decided to pursue the Netflix deal. WBD previously rejected Paramount's initial bid, calling it "illusory" and questioning Paramount's ability to secure the necessary funding. The company then touted Netflix's cash-and-share deal as the superior option. Paramount subsequently returned with a reported $40 billion guarantee from its CEO, David Ellison.

The ongoing bidding war highlights the intense competition for valuable content libraries, including franchises like Harry Potter, Game of Thrones, and DC Comics. The acquisition of such assets is driven by the increasing demand for streaming content and the desire to consolidate media power.

The implications of these large-scale media mergers extend beyond the entertainment industry. The concentration of content ownership raises concerns about potential impacts on diversity of voices, creative control, and pricing for consumers. The use of artificial intelligence in content creation and distribution also adds another layer of complexity, potentially affecting job security for human creators and the overall quality of media.

The rejection of Paramount's bid leaves the future of WBD uncertain. The company's board continues to recommend the Netflix deal to shareholders. The next step involves shareholder votes on the proposed Netflix acquisition, which will ultimately determine the fate of WBD's film and TV studio assets.