What to know
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Netflix withdrew from its $82.7 billion deal to acquire Warner Bros. Discovery’s studio and streaming assets after deeming Paramount Skydance’s counteroffer too expensive.
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Warner Bros. Discovery declared Paramount’s revised $31-per-share bid for the entire company “superior,” giving Netflix four days to match it—which they declined.
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The move clears the path for Paramount’s $111 billion takeover, potentially merging HBO Max subscribers with Paramount’s networks like CBS and Nickelodeon.
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Netflix shares surged up to 13% after hours, while Warner Bros. stock fell as bidding war hopes faded.
Netflix has pulled out of the race for Warner Bros. Discovery, handing victory to rival bidder Paramount Skydance in one of Hollywood’s most intense takeover battles. The streaming giant’s decision came just hours after Warner Bros. announced that Paramount’s sweetened offer topped Netflix’s proposal, forcing executives Ted Sarandos and Greg Peters to walk away.
“At the price necessary to match Paramount Skydance’s latest proposal, the deal is no longer financially appealing.”
The co-CEOs stated Thursday, emphasizing their disciplined approach to spending.
The Bidding War Unfolds
The saga began last October when Warner Bros. put itself up for sale amid streaming wars and cord-cutting pressures. Netflix struck a deal in December for $82.7 billion in enterprise value—covering Warner’s storied studios, HBO Max, and franchises like DC Comics and Game of Thrones—while spinning off Discovery’s networks. But Paramount, backed by tech billionaire Larry Ellison and led by his son David, refused to back down. They launched a hostile bid, lobbied regulators and even President Trump, and jacked up their all-cash offer to $31 per share for the whole company, plus sweeteners like a $7 billion breakup fee and $2.8 billion to cover Netflix’s termination costs.
Warner Bros. Makes Its Choice
Warner Bros. gave Netflix a narrow window to counter, but the streamer opted out, citing regulatory paths and value for shareholders in their original pact. David Ellison hailed the board’s pivot, calling his bid a path to “superior value, certainty, and speed to closure.” If approved, the merger would create a media behemoth blending Warner’s CNN, HBO, and sports rights with Paramount’s CBS, Nickelodeon, and Comedy Central—potentially reshaping streaming with over 200 million subscribers combined.
Markets reacted swiftly: Netflix stock jumped as investors cheered the dodged overpay, Warner Bros. dipped on lost bidding frenzy, and Paramount held steady. The deal now hinges on shareholder votes and regulatory nods, expected within 12-18 months. Paramount’s aggressive tactics, including personal equity guarantees from Ellison père worth over $40 billion, underscore how far smaller players will go to grab Hollywood crowns.
This shakeup signals streaming consolidation’s next phase, where discipline trumps empire-building. Paramount eyes synergies to battle Netflix’s dominance, but antitrust scrutiny looms large. Watch for shareholder pushback or fresh twists as Hollywood redraws its map.
