The news: Netflix is preparing to alter its Warner Bros. Discovery (WBD) acquisition offer to an all-cash bid as it looks to speed up the deal timeline and stay ahead of Paramount Skydance’s rival bid, per Bloomberg. The move is intended to make the $83 billion offer more appealing to WBD shareholders.

Zooming out: The news comes as Paramount is suing WBD over its Netflix deal.

• Paramount is requesting that WBD disclose the financial details driving its decision to favor Netflix over Paramount’s higher, $108.7 billion all-cash offer, arguing that investors deserve more transparency into the deal.
• WBD called Paramount’s lawsuit “meritless,” and said Paramount failed to “raise the price or address the numerous and obvious deficiencies of its offer.”

Why it matters: Netflix continues to cement its position as WBD’s preferred buyer. An all-cash offer only sweetens the deal for WBD while simultaneously curbing concerns from shareholders over potential antitrust and competitive issues.

And while a Netflix acquisition will certainly have downsides for the industry, WBD is rejecting Paramount for several key reasons that the lawsuit against it fails to address:

• WBD remains uneasy about Paramount’s financial backing. Larry Ellison’s contribution was initially revocable but later changed, and Jared Kushner’s Affinity Partners—a key backer of Paramount’s offer—stepped away from the deal.
• WBD’s board also fears risks from sovereign funds coming from the Middle East.

Implications for advertisers: A lawsuit from Paramount is unlikely to persuade WBD to reject Netflix, especially with an all-cash offer now on the table that could snuff shareholder concerns. An all-cash offer could shorten the deal’s lengthy timeline by several months, offering advertisers who rely on Netflix’s dominance in streaming and WBD’s strength in prestige content greater clarity on the media industry’s future.