Paramount Set to Win WBD As Netflix Backs Out of Warner Bros. Bid

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Netflix has dropped out of the competition to buy a stake in Warner Bros. Discovery. They won’t match the $31 per share offer made by Paramount and Skydance, meaning David Ellison is now likely to take control of the studio.

Netflix leaders Ted Sarandos and Greg Peters announced Thursday they won’t increase their offer for the deal, stating it’s no longer a good financial investment.

Netflix Walks Away

Sarandos and Peters explained that acquiring the deal was something they wanted if the price was right, but it wasn’t essential to their plans.

We believed the deal we were discussing would have benefited our shareholders and had a good chance of being approved by regulators. However, to compete with the latest offer from Paramount Skydance, the price became too high. Because of this, we’ve decided not to proceed with a matching bid, as it no longer makes financial sense.

The executives at Netflix expressed their gratitude to Warner Bros. Discovery’s leaders, including David Zaslav and the board, stating they felt confident they could have successfully managed the company’s brands. However, they emphasized that the final decision came down to pricing considerations.

As a huge movie fan, I was following the potential sale of Warner Bros. closely. It sounds like the team that was hoping to buy it – that’s us, by the way – really appreciates what a fantastic company Warner Bros. is, and we’re grateful to David Zaslav and the whole WBD leadership team for a fair process. We honestly thought we could’ve done great things with those incredible brands, boosting the industry and creating more jobs here in the States. But ultimately, it wasn’t a deal we needed to make, and we weren’t willing to overpay. It was a good opportunity, but not one we’d force.

Paramount Now Positioned to Win

Okay, so the deal with Netflix falling through is a big shift. Now, Paramount Global, along with Skydance, is the only one seriously making an offer – they’re currently at $31 a share in cash. And just today, Warner Bros. Discovery’s board decided that Paramount’s offer is actually the best one on the table right now – they officially called it a ‘superior proposal’.

The deal includes extra benefits for shareholders, such as a payment of $0.25 per share each quarter starting after September 30, 2026. Additionally, if the deal falls through because of regulatory problems, a $7 billion fee will be paid.

Paramount will pay $2.8 billion to cover the fee Netflix would have to pay Warner Bros. if they cancel their current deal.

Netflix Collects $2.8 Billion

If the deal with Paramount falls through as anticipated, Netflix will get a $2.8 billion payment. Investors reacted positively to this news, and Netflix’s stock price rose over 10% in after-hours trading.

Netflix Refocuses on Core Business

Sarandos and Peters highlighted Netflix’s continued financial health and commitment to significant content investment.

Netflix is doing well and continuing to grow, thanks to our great content and leading streaming service. We plan to invest around $20 billion this year in high-quality movies and shows, and we’ll be adding even more entertainment options. As part of our financial strategy, we’re also starting to buy back company shares.

Now that Netflix is no longer in the running, Paramount Skydance is expected to complete its acquisition of Warner Bros. Discovery, significantly changing the entertainment industry.

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2026-02-27 02:32