Netflix has withdrawn its bid to acquire Warner Bros. Discovery following a competing $111 billion proposal from opponents Paramount Skydance. The streaming giant, which had previously agreed to an $82.7 billion deal in December 2025 for Warner Bros. Discovery asset, including HBO and the Warner Bros. film studio, opted not to match the higher offer. Netflix co-CEOs Ted Sarandos and Greg Peters stated, “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”.
Warner Bros. Discovery’s board notified Netflix of the superior proposal status on Thursday, giving the company four business days to submit a revised counteroffer. Netflix chose to terminate the agreement instead, securing a $2.8 billion breakup fee payable by Warner Bros. Discovery upon the deal’s collapse. Sarandos and Peters emphasized the strategic calculus behind the decision, saying, “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 they stated unequivocally, “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price”.
The bidding war began with Netflix’s initial agreement to acquire Warner Bros. Discovery assets, separating Discovery Global, at a total enterprise value of $82.7 billion (equity value of $72.0 billion). Paramount Skydance escalated with its revised offer to $31 per share, prompting Warner Bros. Discovery to deem it a potential “company superior proposal.” Netflix had extended a seven-day window for Warner Bros. Discovery to engage Paramount Skydance, aiming to provide shareholder clarity amid prior noise from hypothetical offers and direct shareholder communications.
Paramount Skydance’s proposal covers the entirety of Warner Bros. Discovery, including pay-TV channels like CNN, TBS, and TNT, and includes funding for Netflix’s termination fee. The deal faces regulatory scrutiny from U.S. and European authorities, particularly the Justice Department’s antitrust division. Should approvals fail, Netflix could potentially re-enter as a bidder.
Market reactions were swift post-announcement. Netflix shares rose more than 8% in after-hours trading, Paramount shares climbed 6%, while Warner Bros. Discovery shares edged down 1.7%. Netflix plans to redirect resources to its core business, committing about $20 billion this year on films and television series to expand offerings. Sarandos noted in prior commentary that the waiver for Warner Bros. Discovery to negotiate with Paramount addressed shareholder confusion. This development marks a pivotal shift in Hollywood’s consolidation landscape, with David Ellison of Paramount Skydance positioned to control major studios, HBO, and CNN if the deal proceeds.
