Warner Bros. Discovery (WBD) leadership is about to make things awkward for Paramount Skydance (PSKY). The media company plans to formally tell shareholders to reject Paramount's recent takeover bid and stick with the existing deal it struck with Netflix (NFLX), according to the Wall Street Journal.

The announcement could come as soon as Wednesday, and it puts the ball squarely in Paramount CEO David Ellison's court. Does he sweeten the offer or walk away?

Here's where it gets interesting: the two bids aren't really apples to apples. Netflix has offered $27.75 per share in a combination of cash and equity, but they're only buying specific pieces of Warner Bros. Discovery. Think HBO Max streaming service and production lots, not the whole enchilada.

Paramount, meanwhile, is offering $30 in cash per share for the entire company. On the surface, that looks like more money. But Warner Bros. Discovery's board apparently thinks the Netflix deal makes more strategic sense, even at a lower per-share price.

The timing matters here too. Paramount's tender offer expires on January 8, which means Ellison has a few weeks to decide whether to up the ante. He might wait until the deadline gets closer before showing his cards and revealing whether there's room to improve the terms.

The market's reaction? Pretty muted so far. Warner Bros. Discovery shares dipped slightly after the report broke, while Netflix and Paramount Skydance both traded mostly flat in Tuesday's extended session. Seems like investors are waiting to see how this plays out before making any big moves.