Netflix Backs Out Of Warner Bros. Deal, Clearing The Path For Paramount’s Controversial Takeover

Netflix surprisingly backed out of its bid for Warner Bros. Discovery, ending a months-long bidding war with Paramount Skydance.

To Netflix’s co-CEOs, the WBD studio and streaming assets would have been a smart investment, but it was not worth infinite wads of cash. Paramount upped its bid for WBD to $111 billion, about 34% higher than Netflix’s initial nearly $83 billion deal.

“The transaction we negotiated would have created shareholder value with a clear >statement released February 26. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

The streaming platform had been interested in buying WBD since last fall and emerged early December with a merger agreement to acquire WBD for about nearly $83 billion. Paramount Skydance shook things up, however, and soon emerged as another interested party, raising the stakes with hostile bids. At last, it’s poised for the win.

Before Netflix officially backed out, Paramount Skydance CEO David Ellison shared a statement on Thursday, where he said he was pleased the WBD board “unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty, and speed to closing.”

But Paramount Skydance’s takeover remains controversial, and not just because it would form (what some argue is an illegal) quasi-monopoly in entertainment. Owner and CEO David Ellison, son to Larry Ellison, has already made efforts to cozy up to the Trump administration to help keep his business moves in the clear.

When Skydance bought Paramount in August 2025, it aimed to win government approval by saying it would eliminate all DEI practices if the $8 billion merger was allowed to move forward. It did, and so too did mass layoffs follow. CBS News’ Race & Culture Unit was disbanded. Journalists of color were pushed out en masse. Similar worries arise about what pseudo-favors Ellison may bring forth in order to make this latest acquisition move forward. 

“As we navigate dynamic times of economic and technological change, our industry, together with policymakers, must find a way forward that protects producers’ livelihoods and real theatrical distribution, and that fosters creativity, promotes opportunities for workers and artists, empowers consumers with choices, and upholds freedom of speech,” the Producers Guild of America wrote in a late 2025 statement addressing either company’s potential acquisition.

After Netflix has exited the bidding war, Paramount has agreed to pay a $2.8 billion termination fee that WBD must pay Netflix to end the existing merger agreement, per The Hollywood Reporter. Ahead, regulators will decide over the legality of the Paramount Skydance takeover.

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