Netflix has stepped back from its attempt to buy Warner Bros Discovery. Clearing the path for Paramount, backed by Skydance, to emerge as the frontrunner in a months-long takeover battle for one of Hollywood’s most historic studios.
Warner Bros, which put itself up for sale last year, confirmed on Thursday that Paramount’s latest bid was “superior” to Netflix’s offer. Netflix, in turn, chose not to raise its bid, saying the deal no longer made financial sense at the higher price.
Netflix co-chief executives Ted Sarandos and Greg Peters said the company remained disciplined throughout the process.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they said in a statement, adding that Paramount’s revised offer no longer met Netflix’s financial criteria.
The decision came just hours after Sarandos visited the White House. Effectively brings to an end a dramatic bidding war that could significantly reshape the US media industry.
However, regulatory hurdles remain. California Attorney General Rob Bonta said the deal was “not a done deal,” confirming that the California Department of Justice has an open investigation into any potential merger involving Warner Bros.
“These two Hollywood titans have not cleared regulatory scrutiny, and we intend to be vigorous in our review,” Bonta wrote on social media.
Any agreement would also need approval from the US Department of Justice and European regulators.
CNN and political concerns
A Paramount–Warner Bros merger could have major implications for CNN. One of the most influential news brands in the US. Former president Donald Trump has repeatedly criticised the network and said it should be sold off as part of any Warner Bros deal.
CNN chief executive Mark Thompson reportedly emailed staff urging them not to “jump to conclusions” about the network’s future until more details are known. CNN declined to comment.
Political scrutiny has followed Paramount’s bid closely. The company is backed by tech billionaire Larry Ellison, a major Republican donor, and led by his son David Ellison. Earlier support for the bid from Trump’s son-in-law Jared Kushner. Through his investment firm Affinity Partners, also raised concerns before the firm withdrew amid mounting scrutiny.
Paramount’s earlier merger with Skydance in 2025 had already attracted attention from regulators, including the Federal Communications Commission. As part of those negotiations, Paramount agreed to a $16m settlement on behalf of CBS News related to a lawsuit Trump filed over a “60 Minutes” interview with former vice-president Kamala Harris.
What Paramount would gain
If approved, the deal would give Paramount control of Warner Bros’ film studio, HBO and HBO Max, CNN, the Food Network and major sports assets. Warner Bros’ streaming subscribers would be folded into Paramount’s portfolio, which already includes CBS, Nickelodeon and Comedy Central.
David Ellison welcomed the Warner Bros board’s decision. Saying Paramount’s offer provides “superior value, certainty and speed to closing” for shareholders.
A divided Hollywood
Many in Hollywood see the outcome as a no-win situation. Critics feared that a Netflix takeover would accelerate the decline of traditional cinema. While others worry that Paramount’s political ties could influence editorial independence—especially at CNN.
Regardless of the buyer, the sale of Warner Bros is expected to lead to job cuts in Los Angeles, a city already hit hard by production slowdowns.
Netflix had previously agreed in December to buy Warner Bros’ film. And streaming divisions for $27.75 per share, valuing the deal at roughly $82bn (£61bn), including debt. That plan would have spun off CNN and traditional TV networks into a separate company.
In a last-minute move, Paramount raised its offer to $31 per share in cash for the entire company. Agreed to pay a $7bn break-up fee if the deal collapses, and committed to covering the $2.8bn fee Warner Bros would owe Netflix if its earlier agreement fell apart.
For now, Paramount appears to have won the battle—but regulators still hold the final say. Read More
