Netflix is declining to raise its bid to acquire Warner Bros. Discovery’s studio and streaming business, a move that effectively clears the path for Paramount to pursue a takeover of the storied media company.
The streaming giant said Thursday that the higher price now required to compete with Paramount’s revised offer would make the deal “no longer financially attractive,” ending months of public jockeying over the future of one of Hollywood’s most influential companies.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount’s Revised Offer Changes the Equation
Warner Bros. Discovery’s board announced earlier Thursday that a revised bid from Skydance‑owned Paramount was superior to the agreement it had previously reached with Netflix. While Warner’s board reiterated that it still supported the Netflix deal, the company acknowledged that Paramount’s new proposal offered greater value to shareholders.
Paramount recently raised its bid for Warner to $31 per share and agreed to several additional concessions designed to improve its regulatory standing. Those changes included a $7 billion termination fee if regulators block the deal and an accelerated “ticking fee” that would compensate Warner shareholders if the transaction is delayed.
Netflix’s proposal, by contrast, focused only on Warner’s studio and streaming assets and valued the business at $27.75 per share. Paramount is seeking to acquire the entire company.
Neither Paramount nor Warner Bros. Discovery immediately responded to requests for comment on Netflix’s decision to step aside.
A Deal That Could Reshape Hollywood
A full acquisition of Warner Bros. Discovery would significantly alter the media landscape. Paramount’s bid would bring Warner’s sprawling portfolio — including HBO Max, CNN and film franchises such as Harry Potter, Superman and Barbie — under the same corporate umbrella as Paramount Pictures, CBS and the Paramount+ streaming service.
Warner’s television slate, which includes critically acclaimed series such as The White Lotus and Succession, would join Paramount titles like Top Gun, Titanic and The Godfather, combining two of the five major legacy studios that remain in Hollywood.
Industry analysts say the scale of such a merger would give Paramount greater leverage in an increasingly competitive streaming market, but it would also intensify concerns about consolidation in an industry already dominated by a small number of powerful players.
Editorial Concerns at CNN and CBS
Paramount’s recent moves at CBS News have drawn particular scrutiny. Under new Skydance ownership, the company installed Free Press founder Bari Weiss in a leadership role at CBS News, prompting criticism and concerns about editorial independence.
If Paramount succeeds in acquiring Warner, critics warn that similar changes could be pursued at CNN, which has already undergone multiple leadership and strategic shifts in recent years.
Paramount executives have argued that the merger would strengthen journalism and entertainment offerings by providing more stable financial backing. Opponents, including lawmakers and entertainment trade groups, counter that further consolidation could lead to job losses, reduced diversity in storytelling and fewer choices for consumers already facing rising streaming prices.
Antitrust Scrutiny Intensifies
The proposed transaction has triggered significant antitrust concerns. The U.S. Department of Justice has already initiated reviews related to the competing bids, and regulators in other countries are expected to follow.
Netflix, Paramount and Warner have spent months publicly arguing over which deal would face fewer regulatory hurdles. Paramount’s latest concessions appear aimed at addressing those concerns, though analysts note that approval is far from guaranteed.
Paramount is taking on billions of dollars in debt to finance the acquisition, with significant backing from Oracle founder Larry Ellison, whose son, David Ellison, runs Skydance. The involvement of foreign sovereign wealth funds has also drawn scrutiny from regulators and lawmakers.
Politics Adds Another Layer of Complexity
The Ellison family’s close relationship with President Donald Trump has added a political dimension to the deal. Trump has previously made unusual public comments suggesting he could play a role in securing the transaction’s approval, only to later say regulatory decisions would rest with the Justice Department.
The bid for Warner comes just months after Skydance completed its own acquisition of Paramount, a deal that faced controversy and was approved weeks after Paramount agreed to pay $16 million to settle a lawsuit brought by Trump over editing at CBS’s 60 Minutes.
Despite the settlement, Trump has continued to publicly criticize Paramount and the long‑running news program, underscoring the political sensitivities surrounding any further expansion by the company.
For now, Netflix’s exit leaves Paramount as the clear front‑runner to take over Warner Bros. Discovery — a deal that, if approved, would mark one of the most consequential media mergers in decades.
This article includes reporting by the Associated Press.