Netflix Exits Warner Bros Deal, Paramount Skydance Leads

Netflix has officially pulled out of its attempt to acquire Warner Bros. Discovery. As a result, Paramount Skydance now stands as the leading contender to secure the entertainment powerhouse.

Initially, Netflix structured a major cash-and-stock proposal. The offer valued Warner Bros. Discovery at $72 billion in equity. Moreover, the total transaction reached $82.7 billion, including debt. However, Paramount Skydance escalated the competition with a stronger $111 billion bid, including debt. Consequently, Netflix declined to increase its offer.

In a public statement, co-CEOs Ted Sarandos and Greg Peters emphasized strategic discipline. They noted that the transaction presented regulatory clarity and potential shareholder value. Nevertheless, they stressed that the revised price exceeded their financial framework. Therefore, the company refused to pursue the deal further.

They also clarified that the acquisition was never essential. It remained an attractive opportunity only at the right valuation. Hence, Netflix chose fiscal responsibility over aggressive expansion.

Investors reacted swiftly to the announcement. Netflix shares climbed 8.5% in after-hours trading. This surge reflected confidence in leadership’s decision. Additionally, analysts praised the company for avoiding an overvalued purchase. By stepping back, Netflix protected its long-term growth strategy.

Meanwhile, Warner Bros. Discovery’s board shifted its position. Although it previously supported Netflix’s proposal, it now considers Paramount Skydance’s offer superior. This marks a notable change. Earlier, the company labeled Paramount’s move as hostile. However, the higher valuation altered the board’s stance.

CEO David Zaslav expressed optimism regarding the potential merger. He stated that the deal could generate significant value. Furthermore, he highlighted excitement about combining resources with Paramount Skydance.

If regulators approve the acquisition, ownership would expand under Larry Ellison. The transaction would place Warner Bros., HBO, CNN, and CBS News under broader control. Consequently, Ellison’s footprint in global media would increase substantially. However, regulatory review remains ongoing. Therefore, final approval is not guaranteed.

This development signals accelerating consolidation within the entertainment industry. Streaming giants continue to compete for scale and premium content. As a result, disciplined investment becomes increasingly critical. Netflix demonstrated caution and strategic clarity. Meanwhile, Paramount Skydance showcased bold ambition.

Ultimately, the regulatory process will determine the outcome. Until then, the industry watches closely as this transformative deal progresses.