Netflix won't increase bid for Warner Bros., ceding bidding war to Paramount
Netflix said it would not submit a higher offer for Warner Bros. Discovery after the company’s board described Paramount Skydance’s latest offer as “superior.”
The stunning twist leaves Paramount Skydance, headed by David Ellison, as the remaining bidder and in position to take control of the storied media giant.
Paramount’s bid was for the entire company while Netflix was seeking to acquire only its streaming service, HBO cable channel and film studio business.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix in a statement on Thursday afternoon. “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.”
Paramount’s updated offer, released Tuesday, raised the purchase price to $31 a share from $30 — a deal that would value Warner Bros. Discovery at roughly $77 billion. The proposal also included a $7 billion reverse termination fee if regulators block the deal, along with reimbursement for Warner Bros. Discovery’s potential cost to cancel its deal with Netflix.
Netflix and Warner Bros. had agreed to a $72 billion deal, in which Netflix would acquire Warner Bros. Discovery’s film studio, along with HBO and the HBO Max streaming service. Warner Bros. said it could terminate that deal if any revised proposal from Netflix was not deemed superior to Paramount’s offer.
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer,” Paramount CEO David Ellison said. He said his deal would offer “certainty and speed to closing.”
Netflix and Paramount have both been actively lobbying on behalf of their respective acquisition efforts.
Ellison was in Washington this week attending President Donald Trump’s State of the Union address as a guest of Sen. Lindsey Graham, R-S.C., according to a photo on X. Netflix co-CEO Ted Sarandos was also seen arriving at the White House just before 4 p.m. ET on Thursday.
Sarandos previously visited Trump in the Oval Office last year, with the president describing him as “fantastic” on Dec. 7. But moments later, he said a Netflix and Warner Bros. Discovery combination “could be a problem” because of how much market share the resulting company would have.
Sarandos also testified at a Senate Judiciary subcommittee hearing this month, arguing that Netflix’s proposed deal with Warner Bros. would “create more economic growth.”
“This is not a typical media merger where you end up with what’s called the Noah’s Ark problem — two of everything,” Sarandos said at the time. “We are buying a company that has assets that we do not, and we will keep investing in those.”
Earlier Thursday, the same Senate subcommittee requested another hearing, titled “The Second Act: Competition and Monopsony Concerns in the Proposed Netflix-Warner Brothers Transaction,” to be held Wednesday. It’s unclear whether Paramount will face the same requests.
David Ellison is the son of Larry Ellison, the billionaire co-founder of Oracle. The Ellisons are the controlling shareholders of Paramount, and Larry Ellison has a close relationship with Trump.
Trump has also given conflicting signals about how he feels about the Ellisons and Paramount. After the Trump administration approved the Ellisons’ takeover of Paramount, Trump said on Truth Social that “60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before. If they are friends, I’d hate to see my enemies!”
Trump recently told NBC News that he would stay out of the antitrust process, but he previously indicated multiple times that he would be personally involved.
Warner Bros. had previously rejected multiple Paramount offers in the lead-up to Thursday’s announcement, leading Paramount Skydance to escalate its effort into a hostile takeover attempt. That subsequently prompted Netflix to amend its bid to an all-cash offer widely seen as a move to fend off rival interest.
Before Thursday, Warner Bros. had consistently categorized the Netflix proposal as the superior bid for shareholders.
Warner Bros. shareholders are set to vote on the pending transaction March 20. Still, no matter what Warner Bros. decides, the deal must be approved by government regulators.
A prominent investor, Mario Gabelli, whose firm GAMCO owns more than 5 million shares of Warner Bros., told NBC News that “the board finally woke up and did the math” on Paramount’s revised offer, calling it the superior valuation for shareholders. Gabelli has consistently favored the Paramount deal, having previously told NBC News that Netflix’s initial offer was overly complicated compared with Paramount’s.
Gabelli said Netflix could “win automatically” if it upped its bid to $32 a share.
“Right now, the probability is 60% that Netflix drops, 40% that they simplify their deal with $32 cash — or guarantee the value,” he said. “Let’s hope Netflix comes to the realization this is a done deal [and goes] back to leasing content.”
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