Netflix has walked away from its deal to acquire Warner Bros. Discovery’s studio and streaming assets after the WBD board determined that a revised bid from Paramount Skydance represents a superior offer. Paramount’s latest bid of $31 per share in cash, covering the entirety of WBD including cable networks CNN, TBS and TNT, has now unseated the Netflix deal which valued WBD’s studio and streaming assets at $27.75 per share.
Netflix had been given four business days to revise its offer in response to Paramount’s higher bid but chose not to match it. Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement that while the deal they negotiated would have created shareholder value, at the price required to match Paramount’s latest offer it was no longer financially attractive. Sarandos and Peters described the acquisition as always having been a nice to have at the right price, not a must have at any price.
Paramount’s offer also includes a $7 billion breakup fee if the merger fails to win regulatory approval, and the company agreed to cover the $2.8 billion breakup fee WBD would have owed Netflix if that deal fell through. WBD CEO David Zaslav praised Netflix as a partner throughout the process and expressed enthusiasm about the potential of a combined Paramount Skydance and Warner Bros. Discovery.
Markets responded positively to the news for Netflix, with its stock jumping 10% in extended trading Thursday. Paramount shares gained 5% while WBD fell 2%. Sarandos attended meetings at the White House on Thursday to discuss the potential deal, signaling the transaction is attracting attention at the highest levels of government.
Why This Matters to You:
This deal will reshape the media landscape in ways that affect what you watch and where you watch it. A combined Paramount Skydance and Warner Bros. Discovery would bring together major brands including HBO, CNN, Paramount Pictures, TBS, TNT and the Paramount Plus and Max streaming platforms under one roof. For subscribers, that could mean consolidation of streaming services, changes to pricing and shifts in what content lands where. For the broader entertainment industry, it raises questions about competition and whether fewer major studios means less creative diversity. It is also worth thinking about: With Netflix walking away, does this signal a limit to how aggressively even the world’s biggest streaming service will pursue expansion? And as traditional media companies merge to compete with streaming giants, what does the future of cable news and linear TV look like for viewers who still rely on it?
