Netflix is bowing out of the race to buy Warner Bros. The company announced on Thursday that it is declining to match Paramount’s raised bid of $31 per share, which the Warner Bros. Discovery board said constituted a “superior proposal” to Netflix’s $83 billion deal for its studio and streaming assets.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” 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.”
The pair thanked WBD leadership and the board for running a “fair and rigorous” sale process.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” Sarandos and Peters added. “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”
Sarandos and Peters touted a “healthy” and “strong” business that’s growing organically and noted Netflix would spend $20 billion on films and series as it expands its entertainment offering. It also plans to resume its share repurchase program.
WBD’s switch towards Paramount comes after Netflix has faced increased regulatory and political pressure in recent days.
President Donald Trump called on the streamer to fire board member and former UN ambassador Susan Rice or “pay the consequences.” The call came over the weekend after Rice said that corporations who “bent the knee” to the administration would face consequences of their own when Democrats return to power. In a Truth Social post, Trump called Rice “racist” and “deranged” and said she has “no talent or skills.” He also questioned how much she is being paid by Netflix and said that her “power is gone and will never be back.”
In an interview with the BBC on Monday, Sarandos brushed off the president’s comment about Rice, saying Trump “likes to do a lot of things on social media.”
The Department of Justice also issued a civil investigative demand (CID) to theater owners, filmmakers and producers to get their input as part of its antitrust review of the Netflix deal as it evaluates whether a combination with Warner Bros. would hurt consumers, the theatrical business, competition and jobs in Hollywood.
On Thursday, Sarandos headed to Washington to meet with Attorney General Pam Bondi, DOJ antitrust officials and White House chief of staff Susie Wiles about the Warner Bros. deal. It is unclear if Sarandos’ meeting at the White House also included Trump.
Other notable critics of the Netflix deal included filmmaker James Cameron and a group of 11 Republican state attorneys general. California Attorney General Rob Bonta also called for a “full and robust” review of both the Netflix deal and Paramount’s rival bid.
The victory for Paramount CEO David Ellison’s comes after he submitted a total of 10 bids, launched a hostile takeover bid directly to shareholders and a proxy fight with plans to replace WBD’s board at the company’s annual meeting.
The latest bid was a $31 per share, all-cash offer that included a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters and will cover a $2.8 billion termination fee to Netflix. It also agreed to eliminate $1.5 billion in potential financing costs associated with WBD’s debt exchange offer and to exclude the performance of WBD’s Global Linear Networks business from the deal’s “material adverse affect” definition.
The Ellison family trust will provide $45.7 billion in equity financing, which Oracle co-founder Larry Ellison has agreed to backstop with a personal guarantee, including an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks. Bank of America Merrill Lynch, Citi and Apollo are providing a $57.5 billion debt commitment.
Paramount has said it expects to close a deal with Warner Bros. Discovery within a year, pending regulatory and shareholder approval. The company has been engaging with regulators around the globe, including the Department of Justice and European Commission.
Netflix shares surged 9.75% on Thursday in after-hours trading. Shares of Paramount closed up 10%, while WBD stock closed down 2%.
