Netflix signals end of Warner Bros pursuit after Paramount's latest bid

In a stunning last twist in the Warner Bros Discovery (WBD) sale saga, Netflix on Thursday afternoon declined to raise its offer in pursuit of Warner Bros’ streaming and studios business after the WBD board determined Paramount’s latest – and ninth – bid was superior.

In describing the storied film studio and well-regarded TV studio and HBO Max as ”a ‘nice to have’ at the right price, not a ‘must have’ at any price” target, Netflix co-CEOs Ted Sarandos and Greg Peters showed they were committed to a discplined approach and prepared to walk away.

WBD CEO David Zaslav paid tribute to Netflix hierarchy as “extraordinary partners”. He continued, ”Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. 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.”

Zaslav will hold a town hall with staffers on Friday. Screen  understands that the mood among Warner Bros employees was sombre and contemplative on Thursday evening.

A source said that over at Paramount top brass were “jubilant and committed”. Shortly after Netflix said it would not raise its offer Cory Booker, the Democratic senator for New Jersey, called on Paramount CEO David Ellison to appear before a Senate hearing into the merger on March 4.

Paramount’s revised offer of $31 per share and additional sweeteners swung the WBD board in the end. Up until that point it had looked like Netflix would win the day ever since the board accepted the streamer’s $82.7bn offer of $27.75 on December 5.

Paramount entered the fray on December 8 with a hostile $108.4bn bid for the entirety of WBD and has been in pursuit ever since. Eight offers later, Paramount’s seemingly successful bid will be subject to regulatory scrutiny and customary closing conditions.

Concerns 

Ellison, who last year pulled off the $8bn merger between Paramount and Skydance Media, told the UK creative community in an open letter earlier this month that his studio was committed to a 45-day exclusive theatrical window for Warner Bros films that could run to 90 days or more.

While Netflix’s Sarandos also committed to 45-day theatrical exclusivity, there were lingering fears in Hollywood that the streamer, which has never prioritised theatrical distribution in its model, would eventually reduce the window. However Sarandos made a strong case for job creation to WBD and senators – who recently grilled him on the topics of monopoly and pricing – as well as to press during a sustained charm offensive that essentially emphasised the company’s high volume of production required to satisfy its 325m-plus global subscriber base. 

The Hollywood community recognises that Paramount could eventually shorten windows too, in keeping with the overall post-Covid trend and the rise of streaming. After all, Paramount president Jeff Shell was the architect of NBCUniversal’s pandemic-era migration towards the 17- and 30-day studio theatrical release model when he was CEO of that company.

There are other concerns. The absorption into Paramount of WBD and the film studio that generated more than $4bn at the global box office in 2025 and has produced the season’s two best picture Oscar frontrunners means Hollywood is losing another buyer, years after Disney acquired most of the entertainment assets of 21st Century Fox.

Ellison has said his studio giant would release 30 theatrical releases a year with the Warner Bros inventory – a number that has been viewed with skepticism in Hollywood, where the prevailing view is the net result will be fewer studio releases each year.

Another major concern around a Paramount merger is cuts. Paramount previously identified $6bn in cost savings were the merger to close, which the industry interprets as more job losses on top of the 2,000 redundancies scheduled in the wake of the Skydance-Paramount merger.

Given that Paramount’s offer is for the entirety of WBD, it also remains to be seen how a resulting media giant will accommodate both the cable news channel CNN and broadcast CBS news network in its networks division.

Netflix statement

Sources said there was recognition among Netflix employees that the company would not overpay. It will receive a $2.8bn termination fee for its troubles, payable by Paramount on behalf of WBD. 

In its statement on Thursday afternoon Sarandos and Peters said, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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.”

They continued, “Warner Bros. is a world-class organisation, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD board for running a fair and rigorous 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.”

The co-CEOs added, “Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertainment offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase programme.

“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.”

Netflix live-streams the 32nd Annual Actor Awards (Screen Actors Guild) on Sunday, March 1.