Netflix Drops Warner Bros. Bid, Leaving Paramount the Winner

Christopher Palmeri

Fri, February 27, 2026 at 8:05 AM GMT+9 3 min read

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(Bloomberg) – Netflix Inc. dropped out of the fight to buy Warner Bros. Discovery Inc., clearing the way for rival bidder Paramount Skydance Corp. to clinch its $111 billion deal for the historic Hollywood studio.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix said Thursday in a statement. “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.”

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WATCH: Netflix has decided not to increase its bid for Warner Brothers Discovery. Seven Letter Partner Annalyse Keller, Democratic Strategist Arshi Siddiqui and Bloomberg’s Kailey Leinz discuss on “Balance of Power.”Source: Bloomberg

Netflix shares jumped as much as 13% in after-hours trading, indicating that investors were happy to see the company walk away from the deal. Warner Bros. fell with investors no longer anticipating a bidding war. Paramount shares were unchanged.

Netflix inked an $82.7 billion deal, including assumed debt, to acquire the studio and streaming businesses of Warner Bros. in December, but repeated counteroffers from Paramount for the entire company opened up the bidding again. Warner Bros. deemed Paramount’s latest $31-a-share offer superior on Thursday.

Netflix, an early mover in online TV, has built up a profitable business with more than 325 million consumers around the globe paying a monthly subscription for its TV shows and movies.

Legacy film and TV producers like Paramount and Warner Bros. have launched their own streaming businesses, but lack the subscriber base of rivals as their traditional networks lose viewers and advertisers.

Paramount’s offer included Warner Bros. cable-TV networks like CNN and TNT. The company, led by technology heir David Ellison, kicked off the bidding for Warner Bros. with a private offer in September. That was just one month after Ellison closed on the merger of his Skydance Media with Paramount, giving the 43-year-old control of the Paramount film studio, streaming service and TV networks like CBS and MTV.

Warner Bros. began soliciting offers for the business in October before finalizing the deal with Netflix in December.

After apparently losing the fight, Paramount launched a multipronged campaign to get back in the game. The company launched a tender offer for Warner Bros. shares and threatened a proxy fight at the next annual meeting. The company lobbied regulators and politicians including President Donald Trump, with Ellison making multiple trips to Washington to make his case.

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Paramount made adjustment to the terms of its offer after repeated rejections by Warner Bros. Those included personal guarantees on more than $40 billion in equity from David’s father, Oracle Corp. chairman Larry Ellison, one of the world’s richest men.

Paramount also promised to give Warner Bros. $2.8 billion to pay Netflix for terminating their agreement and to pay Warner Bros. $7 billion if its deal fails to win required regulatory approvals.

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