While regulatory hurdles are still in place, Netflix's refusal to raise its bid for Warner Bros. Discovery clears the way for Paramount Skydance to take ownership of the studio.
So, after all that, it's over. Netflix has declined to increase its offer for Warner Bros. Discovery (WBD), after the WBD board judged a rival proposal from Paramount Skydance to be financially superior. The move effectively removes Netflix from the takeover race and positions Paramount as the leading bidder, subject to regulatory approval.
Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement that "at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive."
They added: "This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount’s latest deal on the table reportedly values WBD and its linear cable channels at over $111 billion and includes additional deal protections designed to reduce execution risk for shareholders. If completed, the transaction would combine major film, television, and streaming assets under a single corporate structure, potentially reshaping the balance of power across Hollywood and global streaming.
The deal now moves into a phase likely dominated by antitrust scrutiny, with regulators expected to examine the implications for content supply, platform competition, and consumer pricing.
And given that Variety reports Sarandos met with the Trump administration officials hours before Netflix pulled out of the chase for WBD, it's likely that the co-CEO was warned "of a hellacious regulatory battle" ahead. One that the company in the end had little appetite for.
You will also note that the deal reduces risk for shareholders, not for anything trivial like the people that actually work in the industry. Variety also says that the industry is bracing for job losses ahead.
The good news here, as we wrote when comparing the Netflix and Paramount Skydance bids when all this kicked off in December, is that the Paramount Skydance deal will likely reshape the industry more slowly than a Netflix one would as it is effectively like buying like.
The joint company becomes a larger studio force, yet its global streaming footprint remains much smaller than Netflix’s. That limits its ability to centralize operations at the same scale.
Rationalisation and some consolidation would still occur, but the overall ecosystem would remain more recognisable. Independent producers would retain a wider pool of potential buyers, the labour market would adjust more gradually, and the creative landscape would likely stay more varied, as the new entity would not wield the same level of influence that Netflix might have.
One of the key concerns was the impact the Netflix deal would have on the theatrical market. Under Paramount Skydance, there will still be a contraction, but at a slower pace. Paramount remains more dependent on traditional theatrical windows than Netflix, which creates a stronger incentive to maintain the existing release model. Some slate consolidation is unavoidable — the loss of a distributor typically means fewer films — but the adjustment would be less abrupt.
The result would be a theatrical market that continues to tighten, but without the sharper shift that would likely accompany a streaming-first approach from Netflix.
The losers will probably be consumers, however, both in America and round the world.
“A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families," commented Democrat Senator Elizabeth Warren. "What did Trump officials tell the Netflix CEO today at the White House? A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want. With the cloud of corruption looming over Trump’s Department of Justice, it’ll be up to the American people to speak up and state attorneys general to enforce the law."
Next stop: the courts.
Netflix’s shares surged 8.5% in after hours trading, suggesting rather a lot of relief that the streaming company has not risked overpaying for WBD. Up until then, its shares had fallen by almost a third over the last six months.