Netflix Walks Away From Warner Bros as Paramount Moves In
Netflix has declined to raise its offer for Warner Bros. Discovery, stepping aside in a high-stakes bidding war that now positions Paramount Skydance as the likely buyer of one of Hollywood’s most storied media companies.
Warner Bros. Discovery’s board of directors informed Netflix on Thursday that Paramount Skydance’s latest offer of $31 per share constituted a superior proposal under the terms of their existing merger agreement. Netflix, which had originally agreed in December to acquire Warner’s studio and streaming business for $27.75 per share — a deal valued at approximately $82.7 billion including debt — chose not to raise its bid. Netflix co-CEOs Ted Sarandos and Greg Peters stated that the price required to match Paramount’s offer made the transaction financially unattractive. Netflix responded within two hours of receiving the notice.
Paramount Skydance, which completed its own acquisition of Paramount Global just months ago, has offered to buy all of Warner Bros. Discovery for $31 per share in an all-cash deal valued at approximately $111 billion including debt. The offer is broader in scope than Netflix’s proposal, which had only targeted Warner’s studio and streaming operations. Paramount’s bid covers the entire company, including its cable television networks, news operations and streaming platform.
Warner Bros. Discovery holds an extensive portfolio of media assets. These include HBO, HBO Max, CNN, TNT, TBS, Turner Classic Movies, Food Network and HGTV, alongside a deep library of film and television content spanning franchises such as Harry Potter, Superman and DC Comics properties. A merger with Paramount would bring together content libraries that also include Top Gun, The Godfather, Titanic, and television networks such as CBS, MTV and Nickelodeon, along with the Paramount+ streaming service.
The potential combination would unite two of Hollywood’s five remaining legacy studios. Critics and lawmakers have raised significant antitrust concerns over the scale of consolidation this deal represents. Senator Elizabeth Warren described the prospect as an antitrust disaster, warning that the merger could reduce competition, raise prices for consumers and lead to job losses across the entertainment industry.
The U.S. Department of Justice has already begun reviewing the deal. On the day Netflix walked away, Sarandos met separately with Attorney General Pam Bondi, acting antitrust chief Omeed Assefi and senior Justice Department officials. He also met with White House Chief of Staff Susie Wiles. Justice Department officials had previously indicated they intended to conduct a comprehensive antitrust investigation. Regulatory bodies in other countries are also expected to initiate their own reviews.
The political dimensions of the deal have drawn considerable attention. Paramount Skydance is backed by Oracle founder Larry Ellison, who has close ties to President Donald Trump. Paramount’s acquisition of Warner Bros. Discovery follows shortly after its contentious merger with Paramount Global, which was approved by regulators weeks after the company agreed to pay the president $16 million to settle a lawsuit related to editorial decisions at CBS News program 60 Minutes. Paramount has also made editorial changes at CBS News, including appointing Free Press founder Bari Weiss as editor-in-chief.
A successful Paramount takeover of Warner Bros. Discovery would place CNN under the same corporate ownership as CBS News, raising concerns among media observers about editorial independence and the concentration of news operations under a politically connected ownership group.
To finance its offer, Paramount is taking on substantial debt. Foreign sovereign wealth funds have also contributed equity to the bid, drawing added regulatory scrutiny. To reassure Warner shareholders, Paramount has agreed to pay 25 cents per share for each quarter the deal extends beyond September 2026, and has committed to a $7 billion regulatory termination fee should the merger fail on antitrust grounds.
Warner Bros. Discovery’s board has not yet formally adopted Paramount’s merger agreement, but shareholder approval will be required alongside regulatory clearance before any deal can close. The outcome will significantly reshape the structure of the global entertainment and media industry.
