UPDATE—6 p.m. ET: Netflix is out.
Following Warner Bros. Discovery’s decision to call Paramount’s new merger bid “superior” to Netflix’s deal, the streamer has announced it’s not going to up its offer.
In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said that “the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
The pair thanked WBD for “running a fair and rigorous process” but added that the “transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Netflix’s stock rose around 10% after news broke that it declined the deal.
With that, WBD is set to continue with Paramount’s new bid for its streaming and studio assets, which includes an all-cash offer of $31 per share.
See the full statement from Netflix’s co-CEOs here:
The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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.
Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process. 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. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.
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 entertainment offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program.
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.
PREVIOUSLY:
Are you still watching? Because the Netflix/WBD/Paramount saga has reached its next episode.
On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s updated merger proposal of $31 per WBD share is a “Company Superior Proposal.” Netflix, which previously entered into an agreement with WBD, now has four business days to match.
WBD says its board of directors consulted independent financial and legal advisors for the decision. Among the highlights, Paramount’s offer includes the $31 purchase price in cash, a daily ticking fee of $0.25 per share per quarter (effective after Sept. 30, 2026), and a $7 billion termination fee payable by Paramount if the deal doesn’t go through regulatory approval. Plus, Paramount is on the hook for the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement.
During an earnings call on Thursday, WBD CEO David Zaslav said that any deal the company makes would focus on maximizing value and minimizing downside risk. He added that the company’s board is continuing to lead a “rigorously highly competitive” sales process.
WBD notified Netflix of its decision, giving the company four days to match, per their agreement. Netflix’s bid was revised in January to an all-cash offer of $72 billion, or $27.75 per WBD share.
But will the streamer actually want to continue pursuing WBD? Questions remain, according to Emarketer senior analyst Ross Benes.
“Netflix and Paramount stocks have taken a hit since this bidding war started. Investors will not be keen on increasing bids further. If Netflix pulled out of the WBD sweepstakes, it’d leave rival Paramount to swallow a bigger tab than it originally planned,” Benes said.
However, there may be more at play than just business interests.
“Netflix executives have always spoken of HBO fondly, hoping to become HBO before HBO became Netflix,” Benes added. “There’s a sentimental angle to this deal in Netflix being able to own HBO themselves. We’ll soon learn how far Netflix is willing to go to make that fantasy reality.”
This story has been updated with analyst comments and news that Netflix declined to match Paramount.