The fierce battle for the Hollywood “crown jewel” is coming to a dazzling close. Streaming behemoth Netflix pulled out of the deal to buy Warner Bros. Discovery (WBD), paving the way for Paramount Skydance to become the undisputed victor in one of the biggest media mergers in history.
The deal an acquisition that will cost nearly $111 billion and includes some debt is poised to revolutionize this entertainment landscape, with franchises from Harry Potter; DC Studios; and HBO Max all existing in the same office and workspace as Paramount’s CBS and Top Gun.
The Break Through: Why Netflix Turned Down
For months, Netflix was viewed as the winning alternative after it reached an initial agreement to buy Warner’s studio and streaming assets for $83 billion. But everything changed when Paramount Skydance, supported by billionaire David Ellison and his father, Oracle founder Larry Ellison, mounted an audacious counter-offensive.
- The “Superior” Offer: In response on Tuesday, Paramount increased its offer to a $31 per share deal for the whole company, including WBD’s linear cable networks (such as CNN and Discovery) Netflix had planned to spin off.
- The Netflix “Response:” When challenged with four days to rival the offer, Netflix co-CEOs Ted Sarandos and Greg Peters jointly issued a statement on Thursday calling the deal “no longer financially attractive”.
- Disciplined Strategy: The executives stressed that although they would have been “strong stewards” of the brand, the purchase was a nice to have, not a “must-have” at all costs.
How Paramount Weathered It
Paramount Skydance’s “sweetened” proposal promised WBD shareholders much clearer and faster decision making. A major part of the winning bid includes:
- All-cash payout: A deal for 100% of the company with $31/share all cash.
- Debt & Fee: Paramount agreed to honor the $2.8 billion breakup fee WBD owes Netflix and proposed a $7 billion regulatory termination fee should the deal not pass antitrust testing.
- “Ticking Fee”: A promise that shareholders will receive additional cash for every quarter the deal carries on after September 2026.
A New Media Power: What Comes After?
David Zaslav, WBD CEO, hailed Netflix as an "extraordinary partner," but said he was heartened by the integrated power of Paramount and Warner Bros., bringing together two of the "Big Five" legacy Hollywood studios into one giant that offers them a vast network through film, television, and news. The deal faces still possible hurdles, from the Department of Justice’s antitrust investigations to worries that lawmakers such as Senator Elizabeth Warren may be too antitrust-minded.
