Paramount wins Warner Bros deal as Netflix walks away

Nathan Jolly

February 27, 2026 12:44

Paramount wins Warner Bros deal as Netflix walks away

Paramount Skydance boss David Ellison has won the battle for Warner Bros Discovery, as Netflix retreat

Paramount Skydance has finally prevailed in its ongoing bid to acquire Warner Bros Discovery in its entirety, after Netflix dropped out of the race, despite having already secured a deal to buy its studios and streaming properties.

Paramount’s new $31-a-share offer (A$43.6) to buy the company was dubbed a “superior proposal” to Netflix’s agreement by the WBD board. Netflix has declined to increase its original offer, and will instead walk away.

Paramount’s tenth bid over a five-month period was for $111b (A$156b) for the entire company, including its linear cable channels, while Netflix’s offer for just the movie studios and HBO valued those entities at $83b.

Netflix issued a statement pulling out of the deal just two hours after the board issued its guidance on Paramount’s offer.

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“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint 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, so we are declining to match the Paramount Skydance bid.”

After thanking the board for running “a fair and rigorous process”, the pair 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.

“Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program. We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”

Netflix co-CEO Ted Sarandos walked away from the WBD deal — and will pocket US$2.8 billion in breakup fees, too

WBD CEO David Zaslav wished Netflix well in the future in a statement, writing: “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”

Samuel A. Di Piazza, Jr, chair of WBD said: “I am extremely proud of the rigorous process this Board has run over the past five and a half months that has led us to the cusp of combining these two storied companies and the excitement it will bring to audiences for many years to come.”

Should the deal not pass regulatory muster, Paramount will pay WBD a $7 billion fee. Paramount has also agreed to pay the $2.8b fee to Netflix to terminate the existing merger agreement.