Netflix Exits Bidding War for Warner Bros. Discovery, Paving the Way for Paramount – A Hollywood-Shaping Mega-Deal Concludes

*Paramount Increases Offer to $31 Per Share; Netflix Declines to Match After Evaluation, Ending a Months-Long Contest*

LOS ANGELES – February 27, 2026 – Streaming giant Netflix announced today that it will not raise its offer for Warner Bros. Discovery (WBD), clearing the way for Paramount Global and its backer, Skydance Media, to secure a decisive victory in this high-stakes Hollywood bidding war. Pending regulatory approval, Paramount is set to acquire a media empire boasting顶级 IPs including Harry Potter, Game of Thrones, the DC Universe, and CNN.

The months-long contest concluded with Paramount’s “superior proposal” prevailing. Paramount had previously upped its bid to $31 per share in cash, valuing the entire transaction (including debt) at approximately $111 billion – significantly higher than Netflix’s initial offer of $27.75 per share, totaling roughly $82.7 billion.

Netflix Statement: Financial Discipline Prevails, Will Not Match Paramount’s Bid

Netflix Co-CEOs Ted Sarandos and Greg Peters clearly articulated the reasoning behind their withdrawal in a memo to employees. They stated that while the initial agreement with WBD had a clear path and would have created shareholder value, the company always adheres to financial discipline in any transaction.

The executives wrote, “At the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we have declined to match their bid.” They also highly praised WBD’s management and the deal process, emphasizing, “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

In its statement, Netflix also reaffirmed the health and growth trajectory of its business, announcing plans to invest approximately $20 billion in premium content in 2026 and to resume its stock repurchase program in accordance with its capital allocation policy.

Paramount’s Winning Bid: Higher Price and Stronger Commitments

Paramount’s latest offer wasn’t just about the $31-per-share cash price; it also included a suite of附加条款 designed to alleviate shareholder concerns. Key provisions include a “ticking fee” of $0.25 per share payable quarterly to WBD shareholders if the deal isn’t closed by September 30, 2026, due to regulatory delays. Furthermore, Paramount would pay a substantial $7 billion breakup fee if the deal ultimately fails due to regulatory rejection, and it would also cover the $2.8 billion fee WBD owes Netflix for terminating their original agreement.

Paramount CEO David Ellison welcomed the WBD board’s decision. In a statement, he asserted that Paramount’s proposal offers WBD shareholders “superior value, certainty, and speed to closing.”

If the transaction is finalized, Paramount will integrate WBD’s assets, including the HBO Max streaming business, the CNN cable network, the Food Network, and various sports offerings, into its portfolio. This would create a powerful content matrix alongside Paramount’s existing traditional networks like Nickelodeon, CBS, and Comedy Central.

Future Outlook: Fate of Warner Bros. Games Division Under Scrutiny

The conclusion of this merger saga has also sparked industry speculation about the future of WBD’s various business units, particularly its prominent games division. Warner Bros. Games boasts a stable of renowned studios including Rocksteady, NetherRealm, TT Games, and Avalanche Software, and holds重磅 IPs such as Harry Potter, Game of Thrones, Mortal Kombat, and the DC franchise.

Notably, Netflix had previously stated during the bidding process that its $82.7 billion offer did not assign any value to the games division. Netflix Co-CEO Greg Peters had candidly remarked, “They’ve got great studios and great folks working there. So we think that there’s definitely an opportunity there. But just to be clear, we haven’t built that into our deal model.”

According to estimates from market intelligence platform AppMagic, WBD’s mobile games have performed strongly. Game of Thrones: Conquest has accumulated approximately $960 million in revenue, while Harry Potter: Magic Awakened, developed in partnership with NetEase, generated around $465 million on the App Store and Google Play (excluding alternative Android stores). Multiple titles, including the Mortal Kombat and Injustice series, have surpassed $100 million in revenue.

However, more recent releases from Warner Bros. Games have struggled to gain similar traction. DC Worlds Collide, launched earlier this year, has picked up just $9.6 million. A new 4X strategy game, Game of Thrones: Dragonfire, is currently in soft launch. Beyond internal development, Warner Bros. has also generated significant revenue through IP licensing deals, with titles from Zynga, Jam City, and Scopely collectively generating hundreds of millions of dollars.

The strategic direction for Warner Bros. Games under Paramount’s ownership remains to be seen.

Regulatory and Political Dimensions: CNN in the Spotlight

The deal remains subject to regulatory approval, and CNN, as WBD’s most politically sensitive asset, is drawing particular attention. Former President Donald Trump publicly stated in December that he believed CNN should be sold as part of any Warner Bros. deal. He sharply criticized CNN’s management at the time, calling those running the network “corrupt or incompetent” and arguing they should not be entrusted with its operation.

As news of the likely deal spread, CNN head Mark Thompson reportedly sent an internal email to employees, urging them not to “jump to conclusions about the future until we know more.”

Industry Reshaping: Intensifying Pressure for Consolidation in Hollywood

This bidding war has been viewed as a pivotal contest between a traditional Hollywood powerhouse and a Silicon Valley disruptor. Regardless of the outcome, the sale of Warner Bros. Discovery will have profound ramifications for the entertainment industry. Analysts point to mounting pressure for consolidation among major studios as traditional cable TV businesses continue to decline and box office revenues soften. Having invested heavily in developing streaming platforms in recent years, companies are now being forced to cut production budgets and staff to improve profitability.

A successful acquisition of WBD by Paramount would create a mega-media conglomerate spanning film, television, streaming, news, and gaming – intensifying industry concentration and potentially triggering a new wave of mergers and acquisitions.

As of this writing, WBD’s shares were down slightly in after-hours trading, suggesting the market had anticipated the improved offer. Both Paramount and Netflix shares saw modest gains.