Netflix bows out of WBD bid after Paramount’s revised offer comes in

Netflix has opted to walk away from a deal to acquire select assets of Warner Bros. Discovery after Paramount Skydance upped its offer.

Paramount offered WBD $31 per share to acquire all of the company, which was an increase over the $30 per share Netflix had offered for only WBD’s streaming and studios assets.

The new deal is the equivalent of roughly $108 billion, which, after taking on $33 billion of WBD’s debt, moves the amount up to around $111 billion.

Netflix’s deal, which WBD’s board had approved before Paramount’s increased bid, would have been valued at around $83 billion, but did not include the company’s linear cable networks.

“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’s co-CEOs Ted Sarandos and Greg Peters said in a statement.

Netflix had four days to respond to the Paramount offer, but declined to use the entire time.

The new deal still calls for Paramount to pay $2.8 billion to WBD, which would essentially be passed along to Netflix as a termination fee that was called for in the original Netflix-WBD deal. Paramount also said it would still eliminate up to $1.5 billion in financing costs linked to debt exchange associated with the deal.

Paramount also upped the regulatory breakup fee to $7 billion, which would be payable to WBD in the event the merger does not make it through regulatory approval. Paramount’s revised bid also includes a requirement to pay additional equity funding as needed in order to obtain a solvency certificate that may be required by its lending financial institutions. 

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Paramount also agreed that its offer cannot be reduced if WBD’s linear cable networks business declines faster than originally outlined. 

After Netflix’s initial WBD offer in December 2025, Paramount continued to express interest in WBD, which ultimately led to a bidding war. 

Despite being unable to acquire HBO Max and Warner Bros. film and TV studio assets, including the WB archive, Netflix will still end up with that $2.8 billion breakup fee, which is essentially being funded by Paramount. 

Netflix likely racked up some stiff legal and financial adviser bills in relation to the now-canceled deal. The company was also investing heavily in marketing the merits of its WBD offer to shareholders, which included broad social media ad spending and a dedicated website, netflixwbtogether.com.

That site has since been updated to redirect users to the announcement that Netflix won’t raise its offer for WBD.

The $2.8 billion breakup fee will more than likely cover Netflix’s offer-related expenses with room to spare, so the company stands to walk away with a decent sum of cash for its troubles, though this has not been confirmed.

Netflix also indirectly succeeded in driving up Paramount’s cost to buy WBD, which could pose challenges to a company already saddled with around billions in debt.

Analysts say that, once the dust settles on the deal, Paramount could be carrying over $90 billion in debt, a figure that could be as high as seven times its EBITDA, a key metric in gauging a company’s financial standing and leverage standing.

It is unclear if Paramount’s deal can make it through regulatory approval, though it likely stands to benefit from its owners ties to the Trump Administration. Paramount is controlled by David Ellison, the son of Oracle founder and billionaire Larry Ellison, who have expressed support for Trump’s administration. The Ellison Trust is contributing around $45.7 billion to help finance the WBD deal. 

When Skydance Media was finalizing its deal to acquire Paramount in 2025, the FCC held up approving the transfer of CBS-owned television stations’ licenses, which was the last step needed for the sale to close, with the commission also launching an investigation into CBS News. However, after CBS News agreed to pay $16 million to settle a “news distortion” lawsuit, largely seen as meritless, that Donald Trump brought against the network, the investigations were halted and the license transfers were given the OK.

Trump had previously expressed a preference that Paramount take over WBD. 

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