In a dramatic shift in the high-stakes Paramount Warner Bros. takeover fight, Netflix has officially walked away from the bidding war, clearing a major path for David Ellison’s Skydance-backed offer.
The streaming giant confirmed Thursday that it will not raise its bid, signaling that the escalating price tag — driven by Paramount’s improved proposal — has pushed the deal beyond what Netflix considers financially prudent.
In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters made clear the company is stepping aside.
Newflix Co-CEO Ted Sarandos – CBS News
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid,” the co-CEOs said.
That language effectively ends Netflix’s pursuit and reshapes the battlefield around Warner Bros. Discovery’s future.
Paramount Skydance Now in Pole Position
With Netflix declining to match the latest terms, Paramount’s bid is widely viewed as the likely winner, pending final board actions and regulatory review.
The logo for Paramount Skydance – Paramount
According to The Hollywood Reporter, the Warner board had already determined earlier Thursday that Paramount’s proposal constituted a “superior proposal” compared to Netflix’s existing agreement.
Paramount Skydance’s latest offer reportedly includes:
- $31 per share
- A $0.25 quarterly ticking fee beginning after Sept. 30, 2026
- A massive $7 billion regulatory termination fee
- Agreement to cover the $2.8 billion breakup fee owed to Netflix
Those sweeteners appear to have shifted the economics decisively.
Netflix Signals Discipline, Not Desperation
While stepping away from Warner Bros., Netflix leadership emphasized the move was strategic rather than reactive.
“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process,” they added. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
A graphic showing the Netflix and Warner Bros. Logos – Netflix
That “nice to have” framing is significant — it signals Netflix never viewed Warner Bros. as existential to its strategy.
Instead, the company says it will continue focusing on organic growth.
Netflix leadership also noted the company plans to invest approximately $20 billion in content this year while resuming its share repurchase program.
What Happens Next
If the current trajectory holds, Paramount Skydance is positioned to secure Warner Bros. Discovery, though several hurdles remain:
- Warner board final approval
- Shareholder processes
- Regulatory review
Still, with Netflix now officially out of the running, the competitive tension that defined the bidding war appears to be fading.
WBD CEO David Zaslav Speaks at a New York Times event – YouTube, New York Times Events
Wall Street reacted quickly — Netflix shares reportedly jumped more than 10% in after-hours trading following the announcement.
The Bigger Industry Picture
Netflix’s withdrawal marks a major turning point in what had become one of Hollywood’s most closely watched corporate battles. An email sent to Warner Bros. Discovery employees today noted that company leaders will hold a Global Town Hall meeting tomorrow, February 27th at 11 a.m. EST.
David Ellison in an interview with Bloomberg – YouTube, Bloomberg Podcasts
For months, the Paramount Warner Bros. situation has represented a potential reshaping of the media landscape. Now, absent a surprise new entrant, momentum has clearly shifted toward David Ellison’s camp.
Whether regulators ultimately allow the transaction to proceed — and what the combined entity might look like — remains the next major question facing the industry.
Are you surprised that Paramount has seemingly won the battle for Warner Bros.? Sound off in the comments and let us know!
