Paramount Skydance Wins Warner Bros. Bid After Netflix Withdraws in February 2026

Paramount Skydance is set to buy Warner Bros. Discovery. This is a big change from Netflix's earlier deal. The sale is now waiting for government approval.
By Newsroom | Business, Media |

Paramount Skydance is poised to acquire Warner Bros. Discovery (WBD) after Netflix ended its pursuit of the media giant. The decision follows a period of intense bidding and negotiation, with Paramount's offer reportedly deemed more favorable by the WBD board.

This outcome marks a significant turn in the ongoing discussions regarding the future of Warner Bros. Discovery. The process involved multiple high-profile entities, including Netflix and the Skydance-backed Paramount, each vying for control of a substantial media portfolio. The finalization of the deal now awaits regulatory approval, introducing a degree of uncertainty to the immediate future.

Paramount Skydance wins Warner Bros Discovery bid after Netflix walks away from deal - 1

Background of the Bidding War

The pursuit of Warner Bros. Discovery by other companies began in October. Initially, WBD had moved towards a deal with Netflix.

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  • December: Warner Bros. Discovery agreed to a deal with Netflix.

  • February (leading up to present): Paramount, backed by Skydance and reportedly supported by activist investor Ancora Holdings, submitted a superior offer. This prompted WBD to grant Netflix a waiver, allowing them to re-evaluate their position against Paramount's improved bid.

  • Recent Days: Netflix announced its withdrawal from the bidding process. This paved the way for Paramount Skydance to move forward with its proposal to acquire the entirety of WBD.

Key Offers and Negotiations

The core of the negotiation revolved around the scope and financial attractiveness of each bid.

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  • Netflix's Proposal: Netflix expressed interest in acquiring Warner Bros.' studio and streaming assets. However, the company ultimately decided not to match Paramount's revised offer, citing financial considerations. Netflix co-CEOs Ted Sarandos and Greg Peters stated that at the price required to match Paramount Skydance's latest offer, the deal was "no longer financially attractive." They also noted that their negotiated transaction "would have created shareholder value with a clear path to regulatory approval."

  • Paramount Skydance's Offer: Paramount's bid, supported by Skydance and its founder David Ellison (son of Oracle founder Larry Ellison), reportedly encompasses the entire Warner Bros. Discovery company. This includes not only the studio and streaming platforms but also WBD's pay-TV networks, such as CNN, TBS, and TNT. Paramount's offer was deemed "superior" by the WBD board, leading Netflix to relinquish its pursuit.

Reasons for Netflix's Withdrawal

Netflix's decision to exit the bidding war was presented as a matter of financial discipline.

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  • Financial Viability: The company indicated that matching Paramount's latest offer would exceed their acceptable financial threshold for the transaction.

  • Antitrust Concerns: Reports suggest that Netflix CEO Ted Sarandos met with the Trump administration to address potential antitrust issues. During a Senate antitrust hearing earlier this month, Netflix and Warner executives argued that a combined Netflix and WBD would not constitute a monopoly in the streaming market, given the existing landscape of numerous streaming services.

Paramount Skydance's Path Forward

With Netflix out of the running, Paramount Skydance is now the presumed victor in the bidding process.

  • Board Approval: The Warner Bros. Discovery board is expected to terminate the existing agreement with Netflix and formally adopt Paramount Skydance's offer.

  • Regulatory Scrutiny: Despite this development, the deal is not yet finalized. It is subject to regulatory approval, a process that has been acknowledged as a potential hurdle. California's Attorney General Rob Bonta has indicated that the state is closely examining both the Netflix and Paramount bids, signaling potential review of the combined entity's market impact, which would unite major Hollywood studios, streaming platforms (HBO Max and Paramount+), and news operations (CNN and CBS).

Evidence and Statements

  • Netflix Co-CEOs Ted Sarandos and Greg Peters: "We are excited about the potential of a combined Paramount Skydance and Warner Bros. We have 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." (Source: Article 1, Article 6)

  • Warner Bros. Discovery Board Statement: Granted Netflix a seven-day waiver to re-engage with Paramount, allowing time for Netflix to consider Paramount's superior bid. (Source: Article 1)

  • David Zaslav, President and CEO of Warner Bros. Discovery: "We wish them well in the future." (Source: Article 6)

  • Macrumors.com: "Netflix has dropped out of the takeover battle for Warner Bros. Discovery, putting Paramount Skydance on course to win the whole WBD business." (Source: Article 4)

  • The National: "Paramount will face scrutiny over its deal." (Source: Article 3)

Expert Analysis

The competition for Warner Bros. Discovery highlights a broader trend of consolidation within the media industry, driven by the evolving landscape of content creation and distribution. The ultimate approval of the Paramount Skydance deal will hinge on how regulatory bodies assess the concentration of media power. While Netflix cited financial discipline, the mention of regulatory meetings suggests that potential antitrust concerns were a significant factor in their strategic decision-making, possibly influencing their willingness to engage in a protracted and costly bidding war. The involvement of activist investors like Ancora Holdings underscores the pressure on incumbent leadership to maximize shareholder value, often through mergers and acquisitions.

Read More: Paramount Skydance Stock Jumps After New Hires and Warner Bros. Buyout Talk

Conclusion and Next Steps

Paramount Skydance has emerged as the favored bidder for Warner Bros. Discovery, following Netflix's withdrawal. The WBD board is expected to formally accept Paramount's offer, which reportedly encompasses the entire company. However, the transaction remains contingent upon receiving regulatory approval. Investigations by state officials into potential antitrust implications are ongoing. The media industry will be closely observing the outcome of these regulatory reviews, which will determine the ultimate ownership structure of Warner Bros. Discovery and its extensive assets.

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Frequently Asked Questions

Q: Why did Netflix stop trying to buy Warner Bros. Discovery in February 2026?
Netflix said that paying the price needed to match Paramount Skydance's offer was too much money. They decided the deal was not worth it for them financially.
Q: What did Paramount Skydance offer to buy Warner Bros. Discovery?
Paramount Skydance offered to buy the whole Warner Bros. Discovery company. This includes TV channels like CNN, not just streaming and movie studios.
Q: Who is Paramount Skydance and why are they buying Warner Bros. Discovery?
Paramount Skydance is a group led by David Ellison, son of Oracle founder Larry Ellison. They want to buy Warner Bros. Discovery to combine its many media assets.
Q: What happens next with the Warner Bros. Discovery sale in February 2026?
The Warner Bros. Discovery board is expected to accept Paramount Skydance's offer. However, the deal still needs approval from government regulators before it is final.
Q: Are there any problems with the Paramount Skydance buying Warner Bros. Discovery deal?
Yes, the deal must be approved by government regulators. Officials in California are looking closely at the deal to see if it creates too much control over media.