Netflix Abandons Warner Bros. Discovery Deal as Paramount Skydance Ups Bid to $31 Per Share

Netflix Abandons Warner Bros. Discovery Deal as Paramount Skydance Ups Bid to $31 Per Share

Netflix walked away from its planned acquisition of Warner Bros. Discovery assets on Thursday, ending weeks of negotiations after rival bidder Paramount Skydance raised its hostile takeover offer to $31 per share in cash—a move that values the entire entertainment conglomerate at $108.4 billion.

The streaming giant's withdrawal marks the latest turn in a monthslong Hollywood consolidation battle that has captivated media investors and raised questions about the strategic value of legacy studio assets in an increasingly digital entertainment landscape. For finance chiefs watching the deal, the collapse offers a case study in acquisition discipline: Netflix co-CEOs Ted Sarandos and Greg Peters concluded that matching Paramount's sweetened terms would make the transaction "no longer financially attractive."

Warner Bros. Discovery's board triggered Netflix's exit by declaring Paramount Skydance's revised all-cash proposal superior to its existing agreement with the streaming company. The board gave Netflix four business days to adjust its offer, but the Los Gatos-based company declined to pursue the assets at the higher valuation. Netflix had been pursuing only WBD's studio operations and select assets, not the entire company, according to the source familiar with the matter.

The decision reflects a broader recalibration in media M&A, where acquirers are weighing the costs of legacy infrastructure against the benefits of content libraries and production capabilities. Netflix's willingness to walk suggests the company sees better returns in organic content development or smaller, more targeted acquisitions than in absorbing large traditional media operations at premium valuations.

Paramount Skydance's $31-per-share bid represents a significant premium and positions the combined entity—already operating under the Paramount Skydance name following an earlier merger—as an aggressive consolidator in the entertainment sector. The all-cash structure eliminates integration complexity but raises questions about financing and the acquirer's balance sheet capacity to absorb such a large transaction.

For Warner Bros. Discovery, the bidding war has created a high-stakes dilemma: accept Paramount's premium offer and potentially face regulatory scrutiny of a massive horizontal merger, or risk losing both suitors if market conditions deteriorate. The company's board now appears committed to the Paramount path, having formally designated that proposal as superior.

The collapse also signals Netflix's continued caution about large-scale M&A despite its dominant streaming position. The company has historically preferred to build rather than buy, investing heavily in original content production while making selective acquisitions of smaller studios and production companies. Thursday's decision suggests that discipline remains intact even as competitors pursue transformative deals.

What remains unclear is whether other bidders might emerge or if Warner Bros. Discovery will successfully close with Paramount Skydance. The $108.4 billion valuation would rank among the largest media transactions in history, likely drawing extended antitrust review. For CFOs in the media sector, the deal's ultimate fate will help define the boundaries of permissible consolidation in an industry still adapting to streaming economics.