Netflix Backs Down: Paramount Storms Ahead in Race for Warner Brothers

Streaming giant Netflix has announced that it is stepping out of the race to buy media group Warner Bros., choosing not to raise its offer. The move has effectively cleared the way for Paramount Skydance, led by producer David Ellison.

Netflix and Paramount had been battling over Warner Bros. for several months. Netflix had previously reached a preliminary agreement to buy Warner Bros. studio and HBO Max for $82.7 billion. However, Paramount came forward with a stronger offer — $111 billion — backed financially by David Ellison’s father, Larry Ellison, the founder of Oracle.

In an official statement, Netflix co-CEOs Ted Sarandos and Greg Peters said the deal was “desirable” at the right price, but not “essential” at any price. The company chose not to outbid its rival, saying the agreement was no longer financially attractive.

Paramount’s potential acquisition of Warner Bros. Discovery must now go through antitrust reviews in both the US and Europe. If regulators block the deal, Netflix could return to the negotiating table.

After withdrawing from the bidding, Netflix shares rose by nearly 10% in after-hours trading. Shareholders had previously questioned whether buying Warner Bros. made financial sense. Since news of the possible deal first broke, Netflix’s market value had fallen by $60 billion.

If regulators approve the deal, David Ellison will gain control of two of Hollywood’s most recognisable studios, as well as HBO and CNN — a shift that could significantly reshape the balance of power in the global media industry.