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Los Angeles, USA – February 27, 2026 – Netflix has officially withdrawn from negotiations to acquire Warner Bros. Discovery (WBD), ending its pursuit of the media conglomerate and paving the way for Paramount Global—backed by Skydance Media—to emerge as the frontrunner in the ongoing takeover saga.
The streaming pioneer, which had entered the fray late last year with a preliminary non-binding offer valued at approximately $45–48 billion (including debt), informed WBD's board on Thursday that it would no longer participate in the bidding process. Sources familiar with the matter told industry outlets that Netflix's decision stemmed from internal assessments that Paramount-Skydance's revised proposal offered superior strategic and financial terms.
Netflix's retreat follows weeks of intense speculation about a potential blockbuster merger that would have combined the world's largest streaming service with one of Hollywood's historic studios, home to franchises such as Harry Potter, DC Comics, HBO, and Max. The proposed deal had raised antitrust concerns and questions about Netflix's willingness to take on significant debt to expand its traditional media footprint.
Paramount-Skydance, led by media mogul David Ellison and supported by private equity and sovereign wealth funds, has been in advanced talks with WBD for months. Their latest offer—reportedly in the range of $50–52 billion including debt assumption and equity components—is understood to include a mix of cash, stock, and performance-based earn-outs tied to streaming and box-office milestones. The structure is said to provide WBD shareholders with a clearer path to value realization while preserving key assets under the combined Paramount-Skydance entity.
WBD, formed in 2022 from the merger of WarnerMedia and Discovery, has struggled with high debt levels (approximately $40 billion post-merger), declining linear TV revenues, and intense competition in streaming. CEO David Zaslav has publicly acknowledged the need for strategic options to unlock shareholder value, including potential sales, mergers, or asset divestitures.
Netflix's withdrawal is seen as a strategic pivot back to organic growth. The company has invested heavily in content production, international expansion, and new revenue streams such as advertising tiers and live events, achieving record subscriber gains and profitability in recent quarters. Analysts suggest Netflix likely concluded that absorbing WBD's legacy infrastructure, theatrical risks, and regulatory hurdles would divert resources from its core streaming dominance.
In a brief statement, Netflix confirmed the decision without elaborating on specifics: “After careful evaluation, we have chosen not to proceed with a bid for Warner Bros. Discovery. We remain focused on delivering exceptional content and growing our global membership base.”
Paramount Global, which itself completed a major restructuring and merger with Skydance in late 2025 (valuing the combined entity at around $28 billion), now appears positioned to finalize a deal with WBD. The transaction would create a powerhouse with control over CBS, Paramount Pictures, MTV, Nickelodeon, Showtime, and a strengthened streaming service (Paramount+), alongside Warner Bros. assets including HBO, Max, DC Studios, and Warner Bros. Pictures.
Industry observers note that the deal—should it close—would face scrutiny from U.S. antitrust regulators, particularly given the concentration of premium content and streaming market share. However, proponents argue it would foster greater competition against Netflix and Disney by building a more robust third major player.
WBD shares rose modestly in after-hours trading following news of Netflix's exit, reflecting investor optimism about a Paramount-Skydance resolution. Paramount and Skydance have not issued public comments, but sources indicate negotiations are progressing toward a definitive agreement in the coming weeks.
The development marks a significant shift in Hollywood's consolidation wave, as legacy media companies seek partners to navigate the transition from linear TV to streaming dominance. For Netflix, the move reinforces its independence as the clear streaming leader, while Paramount-Skydance stands on the verge of creating one of the industry's largest combined entities.
Further updates are expected as due diligence and regulatory reviews advance.
