David Ellison has won the bidding war for Warner Bros. Discovery.
Netflix just said it won’t raise its bid for Warner Bros., paving the way for Paramount Skydance to buy WBD and become a Hollywood titan.
The decision comes two days after Paramount increased its offer to $31 per share for all of Warner Bros. Discovery, including its cable networks like CNN and HGTV. WBD’s board said Thursday that Paramount’s latest offer was better than Netflix’s proposal to buy its streaming and studio assets for $27.75 per share.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement. “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 will now pocket a $2.8 billion breakup fee paid by WBD, which Paramount has said it will reimburse.
Netflix investors seem thrilled, as the stock surged by more than 10% in after-hours trading following the announcement. Paramount shares jumped about 5%.
WBD shares slipped 1.8%, a potential sign that shareholders were counting on an even bigger bidding war.
A Hollywood-shaking deal
Ellison, Paramount’s CEO, has relentlessly pursued WBD for months — even after the Netflix-Warner Bros. deal was announced. Paramount has made 10 official offers for the HBO parent company.
Paramount already owns its iconic movie studio, Paramount+, CBS, and TV networks like MTV and Comedy Central.
If Paramount’s WBD deal secures regulatory greenlights, it will get the Warner Bros. studio, HBO, HBO Max, and cable networks like CNN, TNT, and HGTV, plus the Discovery+ streaming service.
HBO Max has 131.6 million subscribers, as of the fourth quarter, while Paramount+ had 78.9 million paid subscribers as of late 2025.
Netflix has over 325 million subscribers as of last quarter.
WBD’s streaming services account for 1.4% TV share on US TVs, according to Nielsen, compared to 2.3% for Paramount’s streamers. For comparison, Netflix is at 8.8% while Disney’s streamers had 4.9% of US watch time in January.
One intriguing sideplot is that CNN may soon find itself with the same corporate parent as CBS News, which Ellison has begun to remake by installing the polarizing Bari Weiss as its editor in chief.
Regulatory rhetoric heated up in recent days
Paramount has framed itself as a better buyer for Warner Bros. than Netflix, which it characterizes as a streaming powerhouse that would wield unhealthy sway over competitors and consumers if it bought HBO and gained access to iconic IP like DC Comics’ Batman.
Netflix argued that it would be a better caretaker of Warner Bros. by laying off fewer staffers than Paramount would, while creating more TV jobs in a Hollywood plagued by fewer productions.
Both Netflix and Paramount have been angling for support from regulators and President Donald Trump.
A White House spokesperson told Business Insider in mid-February that the president “has great relationships with all parties in this potential transaction and remains neutral in this process with no preference” for Netflix or Paramount.
However, Netflix caught Trump’s ire days later, with the president saying that the streaming giant must remove board member Susan Rice “or pay the consequences.” Rice, a White House official during the Obama and Biden administrations, appeared on a podcast and criticized Trump and companies she believes chose to “take a knee” to the president.
Sarandos previously downplayed Trump’s comments, saying the Netflix-Warner Bros. tie-up is “not a political deal.” Sarandos attended meetings at the White House on Thursday, Politico reported, though it’s not clear whether he met with Trump.
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