Faber Report: Netflix & Warner Bros. Discovery amend agreement to all-cash transaction

Watch on YouTube ↗  |  January 20, 2026 at 14:47  |  3:45  |  CNBC
Speakers
David Faber — Anchor, Squawk on the Street / Media Analyst

Summary

David Faber reported that Netflix and Warner Bros. Discovery amended their deal to an all-cash transaction at $27.75 per share, removing the Netflix stock component. The preliminary proxy revealed board estimates for the spun-off Discovery Global, including a 4.5-5.5x EBITDA valuation range, debt details, and EBITDA projections. Faber also noted the April shareholder vote and the possibility that Paramount could return with a higher offer.

  • Netflix and WBD amended their deal to an all-cash transaction at $27.75 per share.
  • The preliminary proxy values the spun-off Discovery Global at $1.33-$3.24 per share based on 4.5-5.5x adjusted EBITDA.
  • Discovery Global carries $17 billion in debt, falling to $16.1 billion by year-end, with a 4.5% average interest rate.
  • CNN generates about $600 million in EBITDA within Discovery Global.
  • Total adjusted EBITDA is projected at $4.8 billion this year, $3.9 billion next year, and $3.3 billion in 2028 before rebounding.
  • A WBD shareholder vote is expected in April, and Paramount may need to raise its offer before the vote.
Ideas
David Faber Anchor, Squawk on the Street / Media Analyst 0:11
WBD all-cash deal plus spin-off value
Netflix and Warner Bros. Discovery amended their deal to an all-cash transaction at $27.75 per share, eliminating the Netflix stock portion. The preliminary proxy shows the board values the spun-off Discovery Global at $1.33-$3.24 per share, adding about $2 per share to the cash consideration for a total value near $29.75. The April shareholder vote and the possibility that Paramount must come back with a higher offer create an event-driven setup for WBD shareholders.
WBD HIGH
David Faber Anchor, Squawk on the Street / Media Analyst 1:05
Discovery Global spin-off valuation looks attractive
The preliminary proxy provides first detailed valuation for the spun-off Discovery Global: the board and advisers believe it should trade at 4.5-5.5x adjusted EBITDA, implying $1.33-$3.24 per share. CNN generates about $600 million EBITDA; total adjusted EBITDA is about $4.8 billion this year, falling to $3.9 billion next year and $3.3 billion in 2028 before rebounding. The entity will start with $17 billion of debt, falling to $16.1 billion by year-end, with an average 4.5% interest rate, much of it trading at a discount and $800 million annual interest cost, which the speaker views as potential value for Discovery Global shareholders.
Discovery Global HIGH
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This CNBC video, published January 20, 2026, features David Faber discussing WBD, Discovery Global. 2 trade ideas extracted by AI with direction and confidence scoring.

Speakers: David Faber  · Tickers: WBD, Discovery Global