Netflix Backs Out of Warner Bros. Discovery Deal, Paramount Skydance Poised to Win
With the withdrawal of Netflix, Paramount Skydance emerges as the favorite to buy all of Warner Bros. Discovery.
Netflix still had a few days to outbid. The clock was ticking. The bankers were waiting. Hollywood held its breath. And then, drama. On the evening of Thursday, February 26, 2026, the streaming giant announced that it would not raise its offer to buy Warner Bros. Discovery. In short: Netflix throws in the towel. After five months of negotiations, counter-offers and quiet meetings, the platform gives up on getting its hands on the studio behind Harry Potter, HBO Max, and CNN.
Officially, the reason is simple: the price. “We have always been disciplined,” explained Netflix co-CEOs Ted Sarandos and Greg Peters in a statement. But to align with Paramount Skydance’s latest proposal, “this transaction is no longer financially attractive.”
From Agreement to Retreat
Just a few weeks ago, Netflix seemed to be in pole position. In December, an agreement was even announced: for $82.7 billion, the platform was to recover the studio Warner Bros. And HBO Max. The historic channels, including CNN and Discovery, would have been isolated into a separate entity.
The marriage promised to be strategic: Netflix strengthening its premium catalog while Warner shed traditional television, which was in decline. A way for everyone to resolve their own weaknesses. Except Paramount Skydance had never really left the table.
A Gigantic Operation
At the start of the week, the group led by David Ellison (the son of Oracle founder Larry Ellison) raised its offer to $31 per share, valuing the entire Warner Bros. Discovery around $110 billion, including debt according to CBS News. This time, it is no longer a question of a partial buyout, but of a total absorption. Studio, streaming, news channels and entertainment: everything would fall into the same package. The board of directors of Warner Bros. Discovery then judges the proposition “superior” as reported by NBC New York. And a few minutes later, Netflix pulls out.
Clashing Visions
Behind this escalation, two visions clashed. While Netflix wanted to extract the profitable core – the studio and the platform – Paramount offered to take over the entire group, cable channels included. CNN, TNT, Discovery, Cartoon Network… and put everything under the Paramount banner.
A gigantic operation. Paramount Skydance will have to take on massive debt to absorb a company that is several times its own valuation. The financial support of Larry Ellison will be decisive. A colossal industrial and financial bet, which would profoundly reshape the balance of studios in Hollywood as noted by The Hollywood Reporter.
Netflix co-CEO Ted Sarandos met with Trump administration officials, including chief of staff Susie Wiles and Attorney General Pam Bondi, to discuss potential antitrust concerns regarding the deal with Warner Bros. Discovery according to CBS News.