LOS ANGELES — In a stunning conclusion to one of Hollywood’s most contentious bidding wars, Netflix officially announced on Thursday evening, February 26, 2026, that it has withdrawn its bid for Warner Bros. Discovery (WBD). The move effectively hands victory to Paramount Skydance, led by CEO David Ellison.
Key Details of the Withdrawal:
- The Decision: Netflix co-CEOs Ted Sarandos and Greg Peters stated that while the merger would have created significant value, matching Paramount’s latest offer was “no longer financially attractive.”
- The Price Gap: Paramount’s winning offer stood at $31 per share (valuing the whole company at over $108 billion). Netflix had offered $27.75 per share for a more limited deal focusing only on WBD’s studio and streaming assets (roughly $83 billion).
- “Nice to Have” Strategy: In a statement, Netflix leadership emphasized their financial discipline, noting: “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount’s Winning Proposal:
- Full Acquisition: Unlike Netflix, Paramount will acquire the entirety of Warner Bros. Discovery, including its cable networks and the news giant CNN.
- The Sweeteners: To seal the deal, Paramount (backed by billionaire Larry Ellison) agreed to:
- A $7 billion regulatory termination fee if the deal fails.
- A “ticking fee” of roughly $650 million per quarter starting in September if the deal hasn’t closed.
- Coverage of the $2.8 billion breakup fee that WBD now owes Netflix for terminating their previous agreement.
Political and Regulatory Context:
The bidding war took a highly political turn in its final days.
- Trump Administration: President Donald Trump and his allies reportedly favored the Paramount bid, citing concerns over a “woke streaming monopoly” if Netflix won. Trump also publicly pressured Netflix to fire board member Susan Rice, a former Obama/Biden official, or “pay the consequences.”
- Washington Meetings: Just hours before walking away, Ted Sarandos was seen entering the White House for talks with administration officials. While Netflix maintained the deal had a clear path to approval, the combined weight of political pressure and the high price tag led to their exit.
What’s Next?
WBD CEO David Zaslav praised Netflix’s leadership but expressed excitement for the “combined Paramount Skydance and Warner Bros. Discovery.” WBD shareholders, who were originally set to vote on the Netflix deal on March 20, are now expected to move forward with the Paramount merger, which will create a media giant larger than industry leader Disney.