Netflix has stepped back from its proposal to acquire Warner Bros Discovery, effectively clearing the path for Paramount Skydance to prevail in a protracted battle for one of Hollywood’s most historic studios according to BBC.
Warner Bros, which put itself up for sale last year, announced on Thursday that Paramount’s revised offer was “superior” to Netflix’s bid. The streaming giant declined to increase its proposal.
Netflix co-chief executives Ted Sarandos and Greg Peters said the company had chosen not to match the enhanced bid because “the deal is no longer financially attractive” at the higher price.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” they said in a statement. “However, we’ve always been disciplined.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount had strengthened its offer days earlier, increasing its purchase proposal by $1 per share. The winning bidder will gain control of the iconic studio, along with its film catalogue and media networks — a move that could significantly reshape the global media landscape.
The development followed a months-long saga that now shifts to regulators for approval. California Attorney General Rob Bonta cautioned that the merger “is not a done deal”, confirming that the California Department of Justice has an open investigation and would conduct a rigorous review. Paramount will also require clearance from the US Department of Justice and European regulators.
The proposed takeover carries major implications for CNN, one of the US’s most prominent news networks. President Donald Trump has frequently criticised CNN’s coverage and previously suggested the network should be sold as part of any Warner Bros transaction. CNN chief executive Mark Thompson reportedly urged staff not to “jump to conclusions” about the company’s future.
Paramount’s bid is backed by technology billionaire Larry Ellison and led by his son David Ellison. The funding structure has drawn scrutiny due to Larry Ellison’s political connections, while an earlier hostile bid had been supported by Jared Kushner through his firm, Affinity Partners, before it withdrew amid political concerns.
Regulatory attention has also extended to Paramount’s broader merger activity, including negotiations with the Federal Communications Commission. A previous settlement involving CBS News, following a lawsuit from Trump over a “60 Minutes” interview with former vice-president Kamala Harris, intensified scrutiny around the company’s political entanglements.
If approved, the acquisition would see Paramount integrate Warner Bros’ HBO Max streaming subscribers into its portfolio and assume control of assets including CNN, the Food Network and various sports networks. Paramount already owns established brands such as Nickelodeon, CBS and Comedy Central.
In December, Warner Bros had agreed to sell its film and streaming divisions, including HBO, to Netflix in a deal valued at roughly $82bn (£61bn). However, Paramount’s improved cash offer of $31 per share — alongside commitments to cover break-up fees — ultimately shifted the board’s support.
Should regulators approve the transaction, the merger is expected to trigger significant restructuring across Hollywood, with potential job losses in an industry already grappling with production cuts and economic uncertainty.