Netflix has backed out of the bidding for Warner Bros., giving Paramount the opportunity to acquire the studio.
The streaming platform’s co-CEOs, Ted Sarandos and Greg Peters, released a statement setting out their decision on Thursday (February 27) following months of discussions.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” they said (via The Hollywood Reporter). “However, we’ve 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.”
They described Warner Bros. as a “world-class organisation” and thanked the conglomerate’s bosses. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S.,” they added. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The latest bid from Paramount Skydance, which was reported to be considered a “superior proposal” by Warner Bros. bosses earlier in the day (via Variety), is now expected to be accepted. The company’s latest proposal was for $31 per share, as well as a ticking fee payable to shareholders equal to $0.25 per quarter from the end of September 2026 and a $7billion regulatory termination if the transaction doesn’t close due to regulatory matters.
Paramount has also agreed to pay the $2.8billion termination fee that Warner Bros. would need to pay to Netflix to terminate the existing agreement. The company’s CEO, David Ellison, said in a statement before Netflix backed out, “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”
Before a Paramount deal is guaranteed, US and European regulators will still need to sign off on the agreement formally, while state attorneys general will also be able to express their views. Senator Elizabeth Warren has described it as an “antitrust disaster”, while Ellison may be called before Congress to discuss the deal.
Last year, meanwhile, President Donald Trump suggested that Netflix’s potential takeover of Warner Bros. could “be a problem”, amid the battle between Netflix and Trump ally Ellison at Paramount.
The Writers Guild of America was also among those speaking out against the potential deal.
As for Netflix now, Sarandos and Peters said: “Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering.”
“We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”