Paramount to Acquire Warner Bros. Discovery, Netflix Backs Out of Deal

The bidding war for Warner Bros. Discovery has concluded with Paramount, backed by Skydance Media and Larry Ellison, set to acquire the media giant. Netflix has withdrawn from the competition, deeming the price no longer financially attractive.

Netflix Withdraws, Citing Financial Concerns

After Warner Bros. Discovery declared Paramount Skydance’s $31 a share offer a “superior proposal,” Netflix was given four business days to counter. Although, Netflix co-CEOs Ted Sarandos and Greg Peters announced on Thursday that they would not increase their all-cash bid of $82.7 billion.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Sarandos and Peters stated. “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.”

As a result of Netflix’s withdrawal, Warner Bros. Discovery will pay a $2.8 billion termination fee to Netflix. Paramount’s offer includes covering this fee.

What Paramount’s Acquisition Includes

The acquisition will bring the entirety of Warner Bros. Discovery under Paramount’s ownership, including studios, HBO, its streaming service, games and entertainment divisions, and linear television networks such as CNN, TBS, TNT, Discovery, and HGTV. TechCrunch reports that David Ellison, whose Paramount was acquired by Skydance Media last year with significant financial support from his father, Larry Ellison, has warned of significant job cuts following the merger.

Concerns Over Consolidation and Potential Impact on Theaters

The deal has raised concerns about consolidation within the entertainment industry. Cinema United, a trade organization for exhibitors, expressed apprehension that a combined Paramount and Warner Bros. Could control as much as 40% of the domestic box office. TechCrunch

Exhibitors are also skeptical that either Paramount or Warner Bros. Discovery will maintain a 45-day exclusive theatrical window for films, a pledge Netflix had made. They fear the merger could lead to fewer film releases mirroring the trend seen after Disney’s acquisition of 20th Century Fox, which saw a 46% decline in releases between 2016 and 2025.

Regulatory Scrutiny and Political Involvement

The merger faces regulatory scrutiny from the U.S. Department of Justice and state Attorneys General, including California Attorney General Rob Bonta, who announced an open investigation. NPR

Senator Mike Lee (R-Utah) has also been involved, grilling Netflix CEO Ted Sarandos during a Senate Judiciary subcommittee hearing on antitrust concerns. While Ellison declined to attend, Senator Cory Booker of New Jersey has called for a continued hearing to question Ellison about the proposed merger.

Ellison’s Role and Financial Backing

David Ellison’s bid is heavily reliant on the financial support of his father, Larry Ellison, the world’s sixth-richest person, who has already provided a personal guarantee of over $45 billion. NPR Larry Ellison has a close relationship with President Donald Trump, who invited David Ellison to attend the State of the Union Address earlier this week.