Netflix said late Thursday it will not raise its offer for Warner Bros. Discovery after the company’s board formally described Paramount Skydance’s latest bid as “superior.” The move ended months of back-and-forth and left David Ellison’s Paramount Skydance as the leading—and now only—bidder to acquire the storied media company.
Paramount’s updated proposal values Warner Bros. Discovery at about $77 billion, or $31 per share in cash, up from its previous $30 offer. With debt included, the total deal would top $110 billion. The bid includes a $7 billion reverse termination fee if regulators block the transaction and reimbursement for Warner’s potential $2.8 billion cost to cancel its Netflix agreement. Paramount said the deal offers “certainty and speed to closing.”
Netflix’s decision to walk away came after the board of Warner Bros. Discovery determined Paramount Skydance’s offer could create more value for shareholders. “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix said in a statement. “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.”
Netflix co-CEOs Ted Sarandos and Greg Peters called their offer “a nice-to-have, not a must-have.” Markets quickly rewarded that stance, sending Netflix shares up as much as 15% in after-hours trading after weeks of declines since the original December announcement. Their initial deal had valued Warner’s entertainment assets—including its streaming business, HBO channel, and film studio—at roughly $72 billion.
Netflix’s proposal had focused on acquiring Warner’s content divisions, while Paramount’s bid seeks to purchase the entire company outright. That distinction made Paramount’s offer more ambitious, but also riskier, given the potential for regulatory challenges. Still, Warner Bros. Discovery’s leadership appeared confident. CEO David Zaslav said in a statement that once the board “votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders.” Chairman Samuel Di Piazza added that he was proud of the “rigorous process” that led to this moment and the “excitement it will bring to audiences for many years to come.”
A shareholder vote at Warner Bros. Discovery is scheduled for March 20, though the board could formally end the Netflix agreement as early as Friday. Any deal between Paramount Skydance and Warner Bros. Discovery would still require regulatory approval before closing.
Paramount first began pursuing Warner Bros. Discovery last fall after completing its own merger with Skydance. The company’s renewed offer followed several rejections and a short-lived hostile tender offer. Until now, Warner had favored Netflix, which presented itself as a cleaner regulatory option. But the added cash and stronger guarantees in Paramount’s new terms pushed the talks toward a turning point.
Both Ellison and Sarandos were spotted in Washington this week as the competition reached its peak. Ellison attended President Donald Trump’s State of the Union address as the guest of Sen. Lindsey Graham, while Sarandos visited the White House hours before Netflix announced it was backing out. Trump had previously praised Sarandos as “fantastic” but later suggested that a Netflix–Warner combination “could be a problem” for regulators because of its potential market power.
Netflix, which has argued its plan for Warner would “create more economic growth,” now leaves the stage to Paramount. The focus shifts to whether Ellison can close the blockbuster deal and whether regulators—and shareholders—will allow one of Hollywood’s biggest studio mergers in years to move ahead. For now, the streaming giant has stepped aside, and Paramount Skydance stands alone at the wheel of Warner Bros. Discovery’s uncertain future.
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