And now back to our regularly scheduled WBD programming…

Try and try as it might, Paramount Skydance’s persistent efforts to acquire Warner Bros. Discovery just keep falling flat. One major obstacle is the strict “no shop” provision in WBD’s signed merger agreement with Netflix—pretty standard language that prevents WBD from soliciting new bids, negotiating with new suitors, or providing additional nonpublic information about the company to other parties. Essentially, WBD can’t communicate with PSKY or its advisors in any way without risking a claim of tortious interference, which would likely scuttle the deal with Netflix and result in years of litigation.

That’s unfortunate for Paramount Skydance, because it’s amazing what you can accomplish when you sit down face to face with someone to tackle your differences. Instead we’re left to interpret their intentions largely through reciprocal S.E.C. filings, a couple of which dropped this week. In particular, the new filings indicate just how frustrated these companies have become with one another—chronicling an epic pissing match that, frankly, only more money can resolve.

For starters, WBD’s January 7 S.E.C. filing contained several not-unexpected revelations: that the board had “unanimously concluded” that PSKY’s $30-a-share all-cash bid for the whole company was still not a so-called “Superior Proposal”—a legal distinction required for the board to abandon its deal with Netflix— and that a “Transaction Committee” consisting of board members Joey Levin, Anton Levy, and Geoffrey Yang had been established to sort of run interference on the deal front, but with the full board retaining final authority. Meanwhile, the filing made clear that the board did not want shareholders to tender their shares to PSKY.

There were plenty of other clues, signals, and bon mots in WBD’s filing. On Christmas Day, our friend Charlie Gasparino reported in the New York Post that PSKY was considering abandoning its bid altogether and heading to court—“an option that PSKY reportedly refers to internally as DEFCON 1,” Charlie wrote. Obviously, that didn’t happen—or hasn’t yet—but litigation is hardly a formula for M&A success. PSKY did not dispute Gasparino’s reporting, and WBD doesn’t seem to have forgotten about it, either. “WBD continues to be of the view that PSKY is a litigious counterparty, which raises concerns regarding the likelihood that the Offer (or any related merger agreement) will be completed on the terms proposed,” WBD wrote in its filing.

That filing also revealed that the WBD board was now nicking PSKY’s bid by $1.79 per share, up from its previous deduction of $1.66, and therefore valuing the bid at $28.21 per share. The revision was due to a new $350 million “associated interest expense” (whatever that means) that, if WBD were to abandon the current merger agreement, would be added atop the $2.8 billion breakup fee owed to Netflix and a $1.5 billion penalty related to the possibility of not being able to refinance some existing WBD junior debt. “PSKY has had ample opportunity to address these concerns and put WBD in a comparable position to the Netflix Merger Agreement, but has continually failed to do so,” the company noted in the filing.

That PSKY believes it did address these perceived problems in its revised tender offer is almost irrelevant at this point, because the WBD board isn’t getting the message. In fact, it’s dialing up the rhetoric. The board also used the filing as a chance to really go to town on the structure of PSKY’s bid, reframing the quixotic father-son vision quest to pay $108 billion in cash for a series of legendary Hollywood entertainment assets as the largest L.B.O. of all time, with some $87 billion of pro forma debt that would be levered at 7x the combined 2026 EBITDA of the two companies, before potentially realizing some $9 billion in “synergies.” Fighting words, indeed. (Disclosure: Through a recent transaction, WBD C.E.O. David Zaslav is a de minimis investor in Puck; RedBird Capital, the Ellisons’ partner in PSKY, is a minority shareholder.)

On paper, WBD shouldn’t care about PSKY’s capital structure. PSKY is bidding all cash, freeing WBD shareholders of an ongoing equity interest in the combined company. But in its filing, WBD expressed concern that the proposed L.B.O.-like capital structure could give the banks financing the deal—Bank of America, Citigroup, and Apollo—a free option to pull out at closing based on whether a third party deemed the combined business to be “solvent” or not.

The use of a solvency opinion to wriggle out of funding an L.B.O. is not just a theoretical worry. Apollo itself used that tactic, unsuccessfully, in trying to get out of a $10.6 billion deal to buy Huntsman Chemical in the wake of the 2008 financial crisis. “In some cases, large L.B.O.s have failed to close due to alleged insolvency risks,” WBD wrote.

Twisting the knife, WBD intoned that PSKY’s “equity financing sources and/or its debt financing sources may assert that the combined company would not be solvent after giving effect to the closing. If PSKY fails to deliver a compliant solvency certificate to the banks, PSKY’s financing providers would be relieved of their obligation to provide the debt financing, and the [Larry Ellison] Revocable Trust and RedBird would then be relieved of their equity funding obligations and the transaction could not close.”

The WBD filing argues that “these risks cannot be ignored in the context of the unprecedented size of PSKY’s contemplated L.B.O. and its financial profile. … In contrast, Netflix is an investment-grade company with a current market capitalization of approximately $400 billion, and does not present this degree of closing risk.”

PSKY couldn’t disagree more with the arguments laid out in WBD’s filing. “Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion,” the company noted in its January 8 S.E.C. response. “Throughout this process, we have worked hard for WBD shareholders and remain committed to engaging with them on the merits of our superior bid and advancing our ongoing regulatory review process.”

The linchpin of the PSKY argument that its $30-a-share bid is superior to the Netflix offer rests on the minuscule value it is now placing on the WBD Global Networks equity stub. In previous calculations, PSKY had valued the stub at $1.40 a share. Given the understandable struggles of Versant, the Comcast linear-networks spinoff, as a publicly traded company, PSKY announced this week that it was now valuing the stub at $0 per share based on Versant’s 3.8x 2026 EBITDA multiple. That doesn’t mean PSKY believes Global Networks is worthless. Rather, the PSKY brain trust is arguing that Global Networks isn’t worth more than the $15 billion of debt that will be larded onto the company as part of the spinoff.

PSKY also called foul on WBD’s assertion that its financial partners would renege on their $54 billion of debt financing. The company noted that these were “global sophisticated financial institutions, with decades of experience financing companies and borrowers in history's largest, most complicated transactions.” As if that weren’t enough, in a statement to a House Judiciary subcommittee, PSKY chief legal officer Makan Delrahim called the WBD–Netflix merger “clearly anticompetitive,” adding that Netflix’s “tortured and absurd” definition of the market under which the deal would pass regulatory scrutiny was “psychedelic antitrust” with “no grounding in market or legal reality.” Delrahim, of course, is a former U.S. assistant attorney general who was in charge of antitrust during Trump I, where he tried unsuccessfully to block the sale of Time Warner to AT&T.

Makan’s argument against the Netflix deal was nothing if not colorful, but I’m not sure these statements are helpful if you are running a massive tender offer that requires, as a condition precedent, a signed merger agreement with the target company. They add to the growing pile of recriminations and negative feelings between WBD and PSKY and don’t serve the objectives of either party particularly well. At the moment, there is a bit of a stalemate between them, and PSKY and WBD don’t have a prayer of getting the signed merger agreement required to make the tender offer effective until and unless PSKY moves above $30 per share. This explains why Camp WBD has taken to calling PSKY’s hostile tender offer nothing more than an elaborate P.R. stunt.

Of course, in its January 7 S.E.C. filing reiterating its support for the Netflix deal, WBD was more diplomatic: “The WBD Board believes it would be unprecedented for a board of directors to abandon a binding agreement for a discretionary tender offer, the material terms of which are in the sole control of the counterparty.”

If the two sides could actually speak to one another, I suspect their differences could be narrowed rather quickly, and likely in PSKY’s favor. After all, WBD is in “Revlon mode” and must sell to the highest bidder, so it is still open to higher bids—it just can no longer solicit them. As I’ve written many times by now, if PSKY wants to win WBD, it’s going to have to put up more of Larry Ellison’s money to get it done—and the sooner the better. I suspect that a bid of $34 a share—another $10 billion from Larry’s pocketbook—will win the day. But it’s been nearly five weeks since PSKY changed the headline value of its bid. No wonder it’s failing to get the attention of the WBD board of directors.

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