Netflix announced Thursday that it will be withdrawing from the bidding process for Warner Bros. Discovery’s studio and streaming assets, marking a major shake-up in the media space after an agreement had previously been agreed to.
The company declined to increase its existing offer after Warner Bros. Discovery’s board determined that a revised proposal from Paramount Skydance was superior.
The news comes after the two sides had previously entered into a definitive agreement on December 5, 2025. Under the terms, Netflix agreed to acquire Warner Bros., including its film and television studios, HBO Max, and HBO, for a total enterprise value of approximately $82.7 billion, with an equity value of $72.0 billion.
That deal involved a cash and stock transaction valued at $27.75 per Warner Bros. Discovery share, with each shareholder receiving $23.25 in cash and $4.50 in Netflix common stock. Ultimately, the acquisition was positioned to occur after the separation of Warner Bros. Discovery’s Global Networks division into a new publicly traded company, which was expected to occur sometime in the third quarter of 2026.
The process became contested when Paramount Skydance, controlled by David Ellison, submitted multiple counteroffers for the entire Warner Bros. Discovery company, including its cable networks like CNN and Discovery.
Paramount’s bids escalated over time, with the latest proposal submitted Thursday offering $31 per share, which Warner Bros. Discovery’s board deemed a “superior proposal” under the terms of its merger agreement with Netflix. That decision triggered a four-business-day period for Netflix to match or exceed the offer.
Paramount Skydance CEO David Ellison speaks with CNBC’s David Faber on August 8, 2025
In response, Netflix released a statement from co-CEOs Ted Sarandos and Greg Peters explaining that the company does not have any plans to match the offer. “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 company said.
Netflix confirmed it was walking away from the bidding, leading to a nearly 10 percent spike in its share price on the day of the announcement. As part of the withdrawal, Paramount has agreed to cover the $2.8 billion termination fee that Warner Bros. Discovery would owe Netflix if the original deal is terminated.
The decision effectively clears the path for Paramount Skydance to proceed with its acquisition of Warner Bros. Discovery. Unlike Netflix’s proposal, which focused on the studio and streaming assets, Paramount’s bid encompasses the entire company, including its cable networks. Warner Bros. Discovery’s board must now formally terminate the Netflix agreement and adopt Paramount’s offer, a process that could lead to a combined entity controlling major Hollywood studios, streaming services like Paramount+ and HBO Max, and networks such as CBS, CNN, and Discovery.
If the merger goes through, it would create a media conglomerate valued at over $111 billion.
The announcement comes after months of intense debate over the Netflix acquisition, which had faced regulatory scrutiny by acquiring only select assets. The Paramount merger seeks to bring content production and distribution under one roof, which is in line with broader consolidation trends in the media space.
The Netflix deal had also been met with opposition from the Trump Administration due to anti-trust concerns. The administration’s position added regulatory uncertainty to Netflix’s bid, as any transaction required Justice Department approval.
