Paramount Skydance wins the bidding war for Warner Bros Discovery after Netflix declines to raise its offer, sending Netflix shares sharply higher.
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| A high-stakes Hollywood takeover battle ends with Paramount Skydance prevailing over Netflix, but regulatory hurdles could still reshape the deal. Image: CH |
Media Tech Desk — February 27, 2026:
Paramount Skydance has emerged victorious in a months-long takeover battle for Warner Bros Discovery, after Netflix declined to raise its bid for the storied Hollywood studio, triggering a surge of more than 10% in Netflix’s share price.
The decisive moment came when Netflix confirmed it would not match Paramount Skydance’s revised $31-per-share offer, which topped Netflix’s $27.75 bid for Warner’s streaming and studio assets. In a statement, Netflix described its approach as disciplined, saying the higher price required to compete no longer made financial sense. The decision signals a clear boundary in Netflix’s acquisition strategy, prioritizing capital discipline over scale at any cost.
Warner’s board is expected to formally terminate its agreement with Netflix and adopt the Paramount Skydance merger proposal. Warner CEO David Zaslav said the combined entity would create “tremendous value” for shareholders and expressed enthusiasm about uniting the companies’ storytelling assets.
Behind Paramount’s bid is billionaire Larry Ellison, co-founder of Oracle and father of Paramount CEO David Ellison. According to a source familiar with Netflix’s thinking, the streaming giant viewed Paramount’s willingness to pay a higher price as economically irrational. Netflix co-CEO Ted Sarandos had hinted earlier in February that the company would remain a disciplined buyer, signaling reluctance to escalate the bidding war.
Financially, the structure of the Paramount offer underscores the scale of the bet. The Ellison Trust is committing $45.7 billion in equity, an increase from earlier pledges, while major lenders including Bank of America Merrill Lynch, Citi and Apollo are providing $57.5 billion in debt financing. Paramount also sweetened its proposal by raising the termination fee payable if regulators block the deal to $7 billion and agreeing to cover Warner’s $2.8 billion breakup fee owed to Netflix.
Strategically, the proposed merger would reshape the media landscape. It would unite two major Hollywood studios, two streaming platforms — HBO Max and Paramount+ — and two prominent news operations, CNN and CBS. The consolidation would intensify competition with Netflix and other global streaming players, while potentially delivering scale advantages in content production and distribution.
However, the transaction faces formidable regulatory scrutiny. Analysts at TD Cowen have suggested federal approval may be likely given the current political climate in Washington, but warned that state-level challenges — particularly in California — could pose risks. California Attorney General Rob Bonta said the state’s Department of Justice has an open investigation and intends a vigorous review. Democratic Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal have also voiced concerns that political favoritism could influence the approval process.
The broader implications extend beyond a single merger. Netflix’s retreat highlights investor preference for financial prudence amid rising debt costs and streaming market saturation. Paramount Skydance’s victory, by contrast, represents a high-stakes wager that consolidation is the path forward in an increasingly crowded media environment.
For shareholders, activist investor Ancora Holdings described the outcome as a win-win, citing the higher cash offer and a clearer path toward regulatory approval. Yet the final chapter has not been written. With multiple regulatory bodies poised to examine the tie-up, the battle for Warner Bros Discovery may be over in the boardroom — but it is only beginning in the halls of government.