Netflix has officially withdrawn from its bid for Warner Bros. Discovery, clearing the way for Paramount Pictures Skydance to take control of one of Hollywood’s most iconic studios.
The streaming giant stepped back rather than assume $9.8 billion in combined regulatory and breakup fees, a move that would have been required if it tried to match Paramount’s $31-per-share offer.
Before walking away, Netflix had proposed to acquire Warner Bros. Discovery for $72 billion, taking on more than $10 billion in debt, which would have pushed the enterprise value to $82.7 billion. The deal would have added over 420 million streaming subscribers worldwide, making Netflix the largest platform in the industry. Industry groups and anti-trust experts opposed the deal, citing potential threats to movie theaters and competition for creative talent in Hollywood.
Netflix co-CEOs Ted Sarandos and Greg Peters said, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” They added that matching Paramount’s bid was no longer financially attractive.
Warner Bros. Discovery’s board determined that Paramount’s revised bid of $31 per share was “superior” to Netflix’s $27.75 offer. Paramount’s offer, backed by equity and debt financing, covers the full company, including studio assets, HBO Max, CNN, the Food Network, Nickelodeon, CBS, and Comedy Central. Paramount also agreed to cover the $2.8 billion breakup fee for Netflix and included a $7 billion regulatory termination fee for their own deal.
David Ellison, Paramount’s CEO, welcomed the board’s approval, saying the proposal delivers “superior value, certainty and speed to closing.” Paramount had pursued Warner Bros. for months, launching a hostile bid campaign and securing the board’s view that it offered stronger value to shareholders.
The merger will face regulatory scrutiny from the California Department of Justice, the United States Department of Justice, and European regulators. California AG Rob Bonta cautioned that the deal “is not a done deal.”
Hollywood insiders see the bidding war as a high-stakes battle with no clear winner. Paramount’s victory preserves traditional studios while Netflix avoids the massive $9.8 billion exposure. If approved, Paramount’s takeover would fold HBO Max subscribers into its portfolio and take ownership of CNN, the Food Network, and other traditional networks, reshaping the media landscape and setting a new benchmark for streaming and studio consolidation.
