Netflix Backs Out of Warner Bros. Discovery Deal, Citing Financial Concerns

Netflix has officially declined to increase its offer to buy Warner Bros. Discovery, saying the transaction “is no longer financially attractive” at the price needed to match a rival bid. This decision leaves the way open for Paramount Skydance’s higher offer to take control of the iconic Hollywood studio and streaming business.

Netflix’s Statement on the Warner Bros. Discovery Deal

In a joint statement from Netflix’s co-CEOs, Ted Sarandos and Greg Peters , the company explained its decision in straightforward terms: “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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.”

Netflix reiterated that it respects Warner Bros. Discovery as a “world-class organization” and thanked the leadership team for conducting what it described as a “fair and rigorous process.” The company also emphasised that its interest in acquiring Warner Bros.’ studio and streaming assets was strategic, not essential.

What Netflix Calls a “Nice to Have”

Sarandos and Peters made a point that Netflix’s pursuit of the deal was never non-negotiable: “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” This echoed the streaming giant’s cautious approach to investments, especially for a deal of this scale and complexity in the media industry.

Even after stepping back, Netflix affirmed that its broader business remains strong. The company plans to invest roughly $20 billion this year in films and series, expand its entertainment offerings, and resume its share repurchase program in line with corporate policy.

Paramount Skydance’s Rival “Superior Proposal”

The backdrop to Netflix’s decision is a competitive bidding battle with Paramount Skydance. Warner Bros. Discovery’s board has determined that Paramount’s revised offer “constitutes a ‘company superior proposal’” under the terms of its merger agreement with Netflix. Paramount’s bid includes all of Warner’s operations, not just the studio and streaming side, and is valued at USD 31 per share with additional financial incentives.

Unlike Netflix’s narrower proposal, Paramount wants to acquire the entire Warner Bros. Discovery company, which would bring networks like CNN and legacy studios under its umbrella. The board’s move to label that bid “superior” triggered a period in which Netflix could have tried to match the offer but chose not to.

What This Means for Hollywood and the Media Landscape

Netflix’s decision not to raise its offer effectively clears the way for Paramount Skydance to potentially take over Warner Bros. Discovery, setting up one of the most significant changes in Hollywood’s corporate landscape in years. The implications stretch beyond ownership of major properties like HBO Max and Warner’s film franchises to broader industry competition and strategic positioning.

At its heart, this move highlights how even massive streaming players like Netflix weigh growth opportunities against financial discipline and shareholder value in big-ticket media mergers.