Streaming Wars Twist: Netflix Out, Paramount In
Netflix drops its $82B takeover bid, handing Paramount a stunning win in the Warner Bros bidding war, reshaping the Hollywood merger landscape.
Netflix has withdrawn its offer to buy Warner Bros. Discovery, clearing the way for Paramount Skydance to win the months-long battle for one of Hollywood's most famous studios.
Warner Bros., which put itself up for sale last year, said on Thursday that Paramount's new bid was "superior" to Netflix's, which declined to increase its offer.
Netflix officials said they declined to match Paramount Skydance's bid because at that price, "the deal was no longer financially attractive."
The winner of the bidding war would gain control of the iconic studio, as well as its films and media networks—a takeover that could significantly alter the media landscape.
Paramount had raised its offer a few days earlier, agreeing to increase its buyout offer by $1 per share.
Netflix co-chief executives Ted Sarandos and Greg Peters said in a statement, "The transaction we have negotiated creates shareholder value and clears the path for regulatory approval." "However, we have always maintained discipline."
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Netflix officials further said, "This transaction was always a 'nice to have' at the right price, not a 'must have' at any cost."
The announcement came just hours after Sarandos visited the White House on Thursday.
Thursday's announcement concludes a months-long dramatic saga that, if approved by regulators, has the potential to reshape Hollywood.
The news network has frequently clashed with Trump over its reporting of his policies, angering the president.
Trump said in December that he believed CNN should be sold as part of any Warner Bros. deal. He called the people running CNN "corrupt or incompetent" and said they should not be entrusted with running the network.
CNN head Mark Thompson sent an email to employees as news of the near-completed deal spread, urging them to "not draw any conclusions about the future until we know more," US media reported. Last December, Warner Bros. agreed to Netflix's takeover offer for some of its assets. But Paramount, backed by tech billionaire Larry Ellison and led by his son David, made a competing offer to become a major Hollywood company.
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On Thursday, Chief Executive David Ellison welcomed the Warner Bros. board's decision in favor of Paramount's superior offer. He said in a statement that the offer provides Warner Bros. shareholders "better value, certainty, and speed of closing."
If Paramount's deal is approved by regulators, the company will add Warner Bros.' HBO Max streaming service to its portfolio. It will also acquire CNN, Food Network, and several sports offerings.
Paramount's traditional networks already include brands like Nickelodeon, CBS, and Comedy Central.
Many in Hollywood have viewed the bidding war between Netflix and Paramount as a battle with no clear winner.
Critics of the Netflix deal have expressed concern that the iconic movie studio will lose out to the Silicon Valley streaming giant, leading to the demise of cinema. But the merger with Paramount, which has touted itself as one of Hollywood's last remaining movie studios, has also angered critics of the company's alleged political connections to the Trump administration—a concern that has also fueled media anger over CNN's future.
Overall, the sale of Warner Bros. will have a major impact on Tinsel Town, as staff cuts are almost certain in a city already grappling with production cuts.
In December, Warner Bros. said it had agreed to sell its film and streaming divisions, including HBO, to Netflix in a deal valued at $27.75 per share, or approximately $82 billion (£61 billion), including debt.
Warner Bros. said it would spin off its remaining businesses, including traditional television networks and the news channel CNN, as an independent company. However, in a last-ditch effort, Paramount agreed this week to pay Warner Bros. a higher takeover fee. The company offered $31 per share in cash, up from $30 per share, to acquire the entire company.
It also agreed to pay $7 billion if the deal doesn't go through, and Warner Bros. agreed to pay Netflix $2.8 billion if the merger plan fails.
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