Netflix has declined to raise its offer for Warner Bros. Discovery, effectively clearing the path for Paramount Skydance — led by CEO David Ellison — to take over the storied Hollywood studio in a deal worth more than $110 billion including debt.
Warner Bros. Discovery's board unanimously declared Paramount Skydance's latest bid "superior" to Netflix's existing agreement on Thursday, February 26, 2026. Paramount's updated offer raised the purchase price to $31 per share, valuing WBD at roughly $77 billion in equity — or over $110 billion including the company's $33 billion debt load.
Netflix, which had held exclusive negotiations since December 2025, chose to stand down rather than match. Co-CEOs Ted Sarandos and Greg Peters said in a joint statement: "This transaction was always a 'nice to have' at the right price, not a 'must have' at any price."
How Did We Get Here?
The bidding war began in fall 2025, when Warner Bros. Discovery announced it was exploring a "broad range of alternative options." Paramount Skydance, Netflix, and Comcast all submitted formal proposals by November 2025. In December, Netflix appeared to win — announcing a $72 billion deal for WBD's studio, HBO, and HBO Max. Paramount refused to concede, submitting a hostile all-cash bid for the entire company at $30 per share on December 8. WBD's board initially rejected Paramount's offer as inadequate, but Paramount kept pushing, raising its bid incrementally until the board flipped.
Key Deal Details
Netflix's offer: $72 billion for WBD's studio and streaming division (HBO, HBO Max) only — at $27.75 per share. It did not include CNN or WBD's linear cable networks.
Paramount's winning offer: $31 per share, all-cash, for the entire company — including CNN, HBO Max, Warner Bros. Pictures, and cable networks. Total enterprise value exceeds $111 billion. The bid includes a $7 billion reverse termination fee if regulators block the deal, reimbursement of WBD's $2.8 billion Netflix breakup fee, and a $0.25 per quarter ticking fee for shareholders starting September 30, 2026.
What Does Paramount Get?
If the deal closes, Paramount absorbs one of Hollywood's most storied studios — gaining Warner Bros. Pictures, HBO, HBO Max, CNN, DC Entertainment, and franchises including Harry Potter, Mortal Kombat, and the broader Warner Bros. content library. Combined, a Paramount-WBD entity would generate an estimated $70 billion in annual revenue, serve approximately 207 million streaming subscribers, and create a studio larger than Disney.
What Are the Risks?
The deal faces significant regulatory scrutiny. The U.S. Department of Justice has already initiated a review, with antitrust concerns centered on the consolidation of two major Hollywood studios and multiple television networks under one roof. Critics — including Democratic senators — have warned the combined entity would control a dominant share of what Americans watch on TV. International regulators are also expected to weigh in.
Political dynamics add another layer of complexity. David Ellison's father, Oracle co-founder Larry Ellison, has a close relationship with President Trump, who previously made public comments about the deal before walking them back. Paramount's recent $16 million settlement with Trump over CBS's "60 Minutes" editing has also drawn scrutiny as context for the deal's regulatory path.
What Happens Next?
A WBD shareholder vote is scheduled for March 20, 2026. Paramount and WBD must first finalize and release detailed deal terms. Even with shareholder approval, the deal still requires clearance from the DOJ and regulators in multiple countries before it can close.
Comments