Netflix Backs Out Of WBD Deal, Cites Paramount’s Raised Offer

The fight for Warner Bros. is over. Netflix has declined to raise their bid to acquire Warner Bros. Discovery’s storied TV, film, and streaming assets after Paramount increased their offer for the entire company.

Netflix had a deal with the legacy brand that would have seen the streamer branch into the theatrical film market and provide content to networks and rival services as a third party producer of original series and movies. However, Paramount has been bullish in its pursuit of WBD, launching a hostile bid in December just days after Netflix and the company announced their agreement.

Paramount’s persistence has paid off. WBD disclosed on February 26 that its new offer constitutes a “Company Superior Proposal” and had given Netflix four days to make a counter bid. However, Netflix has chosen to pull out of the merger agreement.

In a press release, co-CEOs Ted Sarandos and Greg Peters shared that “the deal is no longer financially attractive” at the price they’d have to match Paramount.

The competing proposal is “a purchase price of $31.00 per WBD share in cash, plus a daily ticking fee equal to $0.25 per share per quarter beginning after September 30, 2026, as well as a $7 billion regulatory termination fee payable by PSKY in the event the transaction does not close due to regulatory matters, payment by PSKY of the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement,” according to WBD.

In their statement, Sarandos and Peters explained that the transaction the companies entered into was “always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

WBD had indicated that the board continued to recommend in favor of the streamer acquiring Warner Bros. without withdrawing or modifying the recommendation. But Netflix took their bid off the table.

What Happens Next For Warner Bros. Discovery And Paramount?

WBD is ready to move full steam ahead with Paramount’s deal once its board votes on the merger agreement, per WBD CEO David Zaslav.

He said in a statement that “We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”

However, like with Netflix, the Paramount-WBD deal would need to meet regulatory approval in the United States and abroad. Paramount has maintained it has a clear path to the transaction being permitted. The company’s bid has been under review by the Department of Justice and international regulators. That process is ongoing.

If accepted, the deal would effectively end WBD’s plan to split into two separate companies—Warner Bros. and Discovery Global—so that the legacy brand can merge with Paramount. The possibility of the entertainment giants consolidating has been a source of anxiety for the industry as creatives and consumers grapple with two major TV and film producers becoming one company.

The conversation around antitrust laws concerning WBD’s intent to sell its assets won’t die down in the face of Paramount’s victory. It’ll only increase. A Senate hearing about the Netflix-WBD deal was set for Wednesday, March 4. Though that transaction is now null and void, the hearing remains on the schedule and is presumed to be pivoting to Paramount’s.

Senator Cory Booker (D-NJ) has extended an invitation to CEO David Ellison to attend. The exec declined to participate in the previous Senate hearing about the competing bid. Now that Paramount has entered into an agreement for the company, Booker is looking to Ellison to make an appearance as the CEO reportedly said he would if his company acquired WBD.

The senator is seeking answers from Ellison about any and all involvement of the Trump administration and the Trump family with the deal including personal benefits and discussions of content changes to CNN. Paramount has been directed to preserve information, documentation and communications about the transaction and content decisions at CBS that “reflect real or influence by any member of the Trump administration or any lobbyists or other agents involved with the proposed transaction.”

Ellison’s ties to the Trump family have been closely scrutinized as CBS continues to face backlash over allegations of capitulation to the administration regarding the content of CBS News, 60 Minutes, and The Late Show with Stephen Colbert.