Netflix Walks Away as Paramount’s $111B Bid for Warner Bros Discovery Wins

Netflix has withdrawn its offer to buy Warner Bros Discovery, paving the way for Paramount Skydance to win a months-long war for one of Hollywood's most storied studios in a transaction valued about $111 billion.

Warner Bros, which put itself up for sale last year, said Thursday that Paramount's latest bid was "superior" to Netflix's, which declined to increase its offer. Netflix officials claim they declined to match Paramount's bid because "the deal is no longer financially attractive" at that price point. Last December, Warner Bros. agreed to a takeover offer from Netflix for part of its assets, totaling approximately $82 billion including debt.

Paramount subsequently made a competing offering, which Warner Bros rejected, but an improved offer was made earlier this week, increasing by $1 a share. Earlier this week, Paramount increased its all-cash bid for WBD to $31 per share from $30. The latest Paramount bid contained a $7 billion breakup charge in the event that the proposed merger is not approved by regulators, as well as an agreement to pay the $2.8 billion breakup fee that WBD would owe Netflix if the deal did not go through.

Why This News Matters

At its core, this is a story about who gets to shape the future of entertainment. Netflix walking away shows it’s willing to stay disciplined rather than chase a headline-grabbing deal at any cost. Meanwhile, Paramount’s move to take over Warner Bros. could put a huge slice of Hollywood — from HBO shows to CNN and major film franchises — under one roof. For audiences, that could affect what kinds of shows and movies get made and where you’ll have to subscribe to watch them.

Netflix Walks Away After Price Escalation

The buyer would assume control of the renowned studio, as well as its films and media networks, in a move that has the potential to radically alter the media landscape. However, Netflix stated that the transaction was never necessary. "The transaction we negotiated would have created shareholder value with a clear path to regulatory approval," co-CEOs Ted Sarandos and Greg Peters stated. "However, we've always been disciplined."

This transaction was always a 'nice to have' at the right price, not a 'must have' at any price.

Last week, Netflix gave Warner Bros a seven-day waiver to reengage with Paramount, resulting in the larger bid. The streaming giant then had four business days to resubmit its proposal, but chose to withdraw, capping a drawn-out saga that included altered offers from both bidders. Sarandos stated that the waiver was designed to provide shareholders with clarity after Paramount had caused "flooding the zone with confusion" by addressing investors directly. Following the announcement, Netflix stock climbed 10% in extended trade, Paramount shares rose 5%, and Warner Bros Discovery shares declined 2%.

Regulatory Scrutiny and Political Concerns

If authorized by regulators, the agreement is expected to transform Hollywood, but California Attorney General Rob Bonta has warned that the merger "is not a done deal." His office has launched an investigation and plans to undertake a thorough evaluation, emphasizing that the entertainment industry is crucial to the state's economy. Paramount would also require approval from the US Department of Justice and European regulators, and federal antitrust officials are likely to conduct a thorough assessment.

The funding of Paramount's offer has sparked concern due to its sponsorship by tech tycoon Larry Ellison and leadership by his son David, as well as Ellison's ties to President Trump. Trump has often targeted CNN, claiming that the network should be sold as part of any Warner Bros agreement. Paramount's initial hostile bid was also sponsored by Jared Kushner's Affinity Partners, which withdrew after investigation. Paramount's previous merger, this one with Skydance in 2025, also faced regulatory examination.

Implications for CNN, Streaming, and Hollywood Jobs

A deal between Paramount and Warner Bros. might have major implications for the future of CNN, which Warner Bros. owns. CNN CEO Mark Thompson advised employees not to "jump to conclusions about the future until we know more." If authorized, Paramount will add HBO Max streaming consumers to its portfolio while also acquiring CNN, the Food Network, and other sports businesses, joining current brands such as CBS, Nickelodeon, and Comedy Central.

Many Hollywood insiders see the bidding war as a fight with no obvious winner. Critics thought that a Netflix takeover would kill theatrical filmmaking, but a Paramount merger prompted concerns about political power and media independence. Across the industry, the sale of Warner Bros is expected to result in considerable restructuring and potential personnel cutbacks in an industry already experiencing production slowdowns.

What to Watch Next

Will the people in charge agree? The government could slow down, change, or even stop the deal. What will happen to HBO and CNN? The brand's leadership, strategy, or even its direction could change. If Paramount adds HBO Max to its own services, the prices and the streaming market could change. Mergers usually mean combining companies and cutting costs, which could have an effect on jobs and production.