Netflix Withdraws From Warner Bros Deal, Clearing Way for Paramount Takeover

After months of intense negotiations and a high-stakes bidding war, Netflix has formally withdrawn its bid to buy Warner Bros. Discovery’s studio and streaming business, citing financial reasons and shifting industry dynamics. The move effectively clears the way for Paramount Skydance to become the leading bidder for the historic Hollywood company.

The conflict began late last year when Netflix agreed to acquire Warner Bros. Discovery (WBD) for about $82.7 billion, including assumed debt, in a deal that would have brought major entertainment assets such as HBO and the Warner Bros. film and television studios under Netflix’s control. That agreement also involved plans for Netflix to divest WBD’s older cable networks.

However, Paramount Skydance launched a competing bid for the entire company, proposing to buy all of WBD including its studio, production businesses and cable networks like CNN for roughly $111 billion in total value, or $31 per share in cash. Paramount’s offer also included financial incentives like a higher regulatory termination fee and a “ticking fee” that would compensate shareholders if the deal dragged on, features that made its bid more appealing to WBD’s board.

Under typical merger rules, when WBD’s board designated Paramount’s offer as a “company superior proposal,” Netflix was given a set period to respond with a counteroffer. Instead of matching or raising its original bid, Netflix’s leadership concluded that the revised terms “were no longer financially attractive” and chose to exit the competition, saying the deal was “a nice to have at the right price, not a must have at any price.”

Netflix’s statement, issued by co-chief executives Ted Sarandos and Greg Peters, also thanked Warner Bros. Discovery’s leadership for a “fair and rigorous process” and reiterated Netflix’s confidence in its own growth trajectory, including plans to reinvest in content and focus on expanding the streaming platform organically rather than through large acquisitions.

The decision has already elicited reactions in financial markets. Netflix’s stock rose sharply on the news, with investors welcoming the avoidance of massive debt and regulatory uncertainty tied to the contentious deal. Meanwhile, Paramount’s stock also saw positive movement as it emerged as the presumptive front-runner in the Warner Bros. acquisition.

Paramount’s path forward still depends on regulatory approval from U.S. and international competition authorities. Acquisitions of this scale typically undergo intense review to ensure they do not unfairly limit consumer choice or create monopolistic leverage. Paramount’s bid backed by long-time media investor Larry Ellison’s financial commitments appears designed to satisfy these requirements and offer a clear path to closing.

The unfolding scenario marks a major shift in the entertainment landscape. Rather than a Netflix-centric future where a streaming giant owns a century-old film studio and television empire, Paramount could consolidate huge portions of film, TV and news content under its own umbrella. The possible merger would bring CBS, Paramount+, and Warner Bros. assets together, reshaping how films, TV shows and news programming are produced and distributed globally.

For content creators, media executives and Hollywood watchers, the drama underscores how fierce competition has become for the ownership of legacy and digital entertainment properties. The outcome of the Paramount-WBD deal will likely have long-term effects on global media consolidation, regulatory politics and the balance of power among streaming and traditional studio operations.