Paramount Skydance is set to acquire Warner Bros. Discovery for $111 billion after Netflix walked away from its own $83 billion deal, calling the higher price “no longer financially attractive.” The stunning reversal hands David Ellison’s company one of Hollywood’s foundational studios and the HBO brand, reshaping the media landscape in a single afternoon, Variety reported.
Netflix had until March 4 to match Paramount’s superior bid. Instead, co-CEOs Ted Sarandos and Greg Peters issued a statement less than two hours after WBD’s board declared Paramount’s offer the winner. The move came despite Sarandos lobbying Trump administration officials in Washington earlier that same day — a sign of how much Netflix wanted the deal before the price climbed out of reach.
Netflix walks away from $83 billion Warner Bros. deal
The now-dead Netflix agreement, reached December 5, valued Warner Bros. and HBO Max at $27.75 per share — roughly $82.7 billion. It excluded WBD’s linear cable channels, which Netflix had no interest in owning. The streamer had already begun adding HBO shows like “Ballers,” “Insecure,” “Six Feet Under,” “Sex and the City,” and “True Blood” to its platform, and the deal promised deeper library access spanning “Game of Thrones,” the Harry Potter series, “The Sopranos,” and the DC Universe.
Netflix told subscribers in a letter that “nothing is changing today” and that both services would continue to operate separately until the deal closed. The company signaled it would keep HBO Max as a standalone product while adding select HBO programming to Netflix — a gradual integration rather than a sudden merge.
But when Paramount Skydance raised its offer to $31 per share in cash — about $111 billion for all of WBD, including CNN, TNT, TBS, Cartoon Network, and Discovery Channel — the WBD board had no choice but to engage. Netflix’s co-CEOs framed the exit as discipline, not defeat.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” Sarandos and Peters said. Netflix plans to invest approximately $20 billion in content this year and resume its share repurchase program, signaling confidence in its standalone trajectory.
WBD will owe Netflix a $2.8 billion termination fee, which Paramount has reaffirmed it will cover.
Paramount acquires Warner Bros Discovery in $111 billion deal
Paramount’s revised offer improved on Netflix’s deal in three ways that mattered to WBD’s board. The price rose to $31 per share in cash. The regulatory breakup fee jumped to $7 billion if the transaction fails on antitrust grounds. And Paramount agreed to pay the $2.8 billion termination fee owed to Netflix — money WBD would have been on the hook for.
WBD CEO David Zaslav, who had spent months courting Netflix, pivoted quickly. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” he said. “We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
Board chair Samuel Di Piazza called the five-and-a-half-month sale process “rigorous,” adding that combining the two companies would bring “excitement to audiences for many years to come.”
The first formal negotiations between Paramount and WBD came during a seven-day window ending February 23. Paramount had previously been rejected at $30 per share without substantial back-and-forth. The $31 bid, submitted February 24, changed the calculus entirely. WBD declared it a “superior proposal” the same day, setting the clock for Netflix to respond.
Regulatory politics and the Ellison factor
The bidding war unfolded against a charged political backdrop. David Ellison is the son of Larry Ellison, the tech billionaire financing much of the all-cash transaction and a vocal supporter of President Donald Trump. David Ellison openly touted that connection as a regulatory advantage — a bet that a friendly Justice Department would smooth the path.
Ellison also traveled to Europe to lobby regulators in the U.K. and European Union against the Netflix-WBD combination. He argued Netflix’s international reach made divestiture solutions impossible, since the platform’s global footprint is baked into its DNA rather than concentrated in separable assets.
Sarandos’s meeting with Trump administration officials on the same day Netflix bowed out fueled speculation that the co-CEO was warned of a brutal antitrust fight. The Justice Department had already launched its toughest review, probing whether Netflix plus HBO Max would create monopoly power in streaming and production.
Sen. Elizabeth Warren, D-Mass., slammed the political dynamics. “A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families,” she said. “A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want.”
What Warner Bros. joins under Paramount ownership
The combined company would fold WBD’s cable portfolio — CNN, TNT, TBS, Cartoon Network, Discovery Channel, Animal Planet, Food Network, and HGTV — into Paramount’s linear channels group headed by George Cheeks, who also oversees CBS. That consolidation creates a cable empire spanning news, sports, entertainment, and lifestyle programming.
Paramount’s win likely kills WBD’s plan to spin off its linear channels into a separate company called Discovery Global. That spinoff plan had triggered the auction in the first place, and Netflix’s interest was specifically tied to acquiring the studios and HBO Max without the cable baggage.
The industry is bracing for significant layoffs. The overlap between Paramount and Warner Bros. in film and TV production is substantial, and consolidation rarely spares middle layers. Hollywood insiders were left reeling by the swift about-face, with one foundational studio about to be absorbed by another.
For consumers, the immediate question is what happens to HBO Max. Under Netflix’s plan, the service would have remained standalone while adding content to Netflix. Under Paramount, HBO Max’s future is less clear. Paramount+ and HBO Max would create a formidable combined streaming library spanning “Game of Thrones,” the Harry Potter franchise, “The Sopranos,” the DC Universe, “Top Gun,” “Mission: Impossible,” and “Yellowstone.” But merging two major streamers carries its own risks — Disney’s slow integration of Hulu into Disney+ offers a cautionary template.
The deal still faces regulatory review of its own. But with Ellison’s political connections and a friendlier Justice Department, Paramount may encounter less friction than Netflix would have. The transaction could close within a year if approvals come smoothly, as Variety noted when the original deal was struck last fall.
For more on the streaming wars and Hollywood consolidation, follow the Entertainment desk at AXO News.