What To Know
- In a statement, Netflix confirmed it would not match Paramount Skydance’s revised bid, saying the deal was no longer financially attractive at the required price.
- One adviser described the situation as competing against a bidder willing to pay what Netflix viewed as an irrational premium — referring to billionaire Larry Ellison, whose family backs Paramount CEO David Ellison.
- , even launching a hostile campaign before bringing the company back to negotiations with a higher cash offer.
A major factor behind Paramount’s momentum: roughly $24 billion in backing from Gulf sovereign wealth investors, including Saudi Arabia’s PIF, Qatar Investment Authority, and Abu Dhabi’s L’lmad.
The deal highlights how Middle Eastern capital is increasingly shaping the future of global entertainment and media consolidation.
Paramount Skydance has emerged victorious in a months-long battle to acquire Warner Bros. Discovery after Netflix declined to raise its offer for the Hollywood studio.
In a statement, Netflix confirmed it would not match Paramount Skydance’s revised bid, saying the deal was no longer financially attractive at the required price.
“We’ve always been disciplined,” Netflix said, adding that it was declining to match the latest offer.
Following the announcement, Netflix shares jumped more than 10%.
Paramount’s $31-Per-Share Offer Deemed Superior
Earlier in the day, Warner Bros. said Paramount Skydance’s revised $31-per-share offer was superior to Netflix’s bid of $27.75 per share for the company’s streaming and studio assets.
The Warner Bros board still needs to formally terminate its agreement with Netflix and adopt Paramount’s merger proposal.
Warner CEO David Zaslav said the combination of Paramount, Skydance and Warner Bros. Discovery would create “tremendous value” for shareholders.
Paramount maintained an aggressive pursuit of Warner Bros., even launching a hostile campaign before bringing the company back to negotiations with a higher cash offer.
Why Netflix Walked Away
According to sources familiar with the matter, Netflix’s advisers recommended withdrawing from the bidding war because the economics no longer made sense.
Netflix co-CEO Ted Sarandos previously emphasised the company’s disciplined approach to acquisitions, signalling reluctance to overpay.
One adviser described the situation as competing against a bidder willing to pay what Netflix viewed as an irrational premium — referring to billionaire Larry Ellison, whose family backs Paramount CEO David Ellison.
Rather than escalate the bidding further, Netflix chose to step aside.
Regulatory Scrutiny Ahead
The proposed Paramount-Warner merger would unite two major Hollywood studios, two streaming platforms (HBO Max and Paramount+) and two major news operations (CNN and CBS).
Such consolidation is expected to attract regulatory scrutiny in Washington, individual U.S. states and potentially Europe.
California Attorney General Rob Bonta confirmed his office has an open investigation into the deal and intends to conduct a rigorous review.
Analysts suggest federal approval may be likely given the political climate, but state-level challenges remain possible.
Financing the Deal
Paramount increased the termination fee tied to regulatory failure from $5.8 billion to $7 billion. It also agreed to cover the $2.8 billion fee Warner Bros would owe Netflix for exiting their agreement.
The Ellison Trust is committing $45.7 billion in equity, backed by Larry Ellison, with additional funds pledged if needed to meet solvency requirements.
Major banks including Bank of America Merrill Lynch, Citi and Apollo are providing $57.5 billion in debt financing.
What This Means for Hollywood
If approved, the merger would reshape the entertainment landscape, consolidating film studios, streaming platforms and news networks under one corporate umbrella.
Paramount Skydance’s victory marks a decisive shift in the battle for Warner Bros., while Netflix’s disciplined exit appears to have reassured investors.
With regulatory hurdles still ahead, the next chapter in this Hollywood power play will unfold in courtrooms and government offices rather than bidding rooms.
