Netflix has blinked. Paramount Skydance has won. And Hollywood is about to look very different.
After months of high-stakes negotiations, Warner Bros Discovery announced Thursday that Paramount’s latest $111 billion offer was “superior” to Netflix’s bid — and Netflix refused to raise its own.
The decision clears the way for Paramount, backed by tech billionaire Larry Ellison and led by his son David, to acquire one of the most storied studios in entertainment history, along with a portfolio of iconic brands: Warner Bros films, HBO, CNN, the Food Network, and a range of sports offerings.
Netflix co-chief executives Ted Sarandos and Greg Peters explained their exit in a statement that managed to sound both principled and philosophical.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined. This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price”.
The announcement came just hours after Sarandos had visited the White House Thursday — a visit whose purpose was not disclosed.
The Numbers
The winning bid values Warner Bros at $31 per share in cash — up from Paramount’s initial $30 offer, and significantly above Netflix’s $27.75 proposal. Paramount also agreed to pay $7 billion if the deal falls through, and to cover the $2.8 billion break-up fee Warner Bros had agreed to pay Netflix.
The total deal value, including debt, is approximately $111 billion.
Warner Bros had put itself up for sale last year, signaling a willingness to reshape its future amid industry-wide upheaval. The company’s board formally designated Paramount’s offer as superior Thursday, triggering Netflix’s opportunity to counter. Netflix declined.
The Prize
If approved by regulators, the merger would create a media behemoth rivaling Disney in scale and scope. Paramount would gain control of:
· Warner Bros film studio — home to Batman, Superman, Harry Potter, and decades of cinematic history
· HBO and HBO Max streaming, adding millions of subscribers to Paramount’s portfolio
· CNN, the global news network
· Food Network, TNT, TBS, and other cable staples
· Warner Bros’ television production arm
Paramount’s existing assets include CBS, Nickelodeon, Comedy Central, and the Paramount film studio. The combined entity would span film, television, streaming, news, and sports — a vertically integrated entertainment powerhouse.
The Political Cloud
But the deal is far from done — and the politics are complicated.
California Attorney General Rob Bonta immediately threw cold water on any assumption of smooth sailing. “These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” he posted on social media.
The merger also requires approval from the U.S. Justice Department and European regulators.
Beyond antitrust concerns, the deal has drawn scrutiny over the close ties between President Donald Trump and Larry Ellison, a major Republican donor. Trump’s son-in-law and adviser Jared Kushner initially backed Paramount’s bid through his investment firm Affinity Partners, though he stepped away in December amid scrutiny.
Trump himself has weighed in repeatedly, calling CNN — which would come under Paramount control — “corrupt or incompetent” and suggesting last December that the network should be sold as part of any Warner Bros deal.
CNN head Mark Thompson sent an email to employees Thursday urging them not to “jump to conclusions about the future until we know more,” according to US media reports.
The Concessions
The path to this moment has already required significant concessions from Paramount.
When the company merged with Skydance in 2025, it faced negotiations with the Trump administration’s Federal Communications Commission, which had to sign off on the deal. Among the results: a $16 million settlement on behalf of CBS News over Trump’s lawsuit regarding a “60 Minutes” interview with former Vice President Kamala Harris.
The merger later led to leadership shakeups and layoffs at CBS News.
The Hollywood Reaction
Reaction across Hollywood has been mixed, with many viewing the bidding war as a contest with no clean winner.
Critics of a Netflix takeover feared the Silicon Valley streamer would drain Warner Bros of its theatrical soul, prioritizing algorithm-driven content over cinematic tradition. But a merger with Paramount — a company with its own political baggage and a declared ally of the Trump administration — has left many equally uneasy, particularly regarding CNN’s future.
David Ellison, Paramount’s CEO, welcomed the Warner Bros board’s decision in a statement Thursday, calling the proposal “superior value, certainty and speed to closing”.
What’s Next
The deal now faces months — possibly years — of regulatory review. Bonta’s California investigation is just the beginning. The Justice Department and European regulators will conduct their own examinations. And the political questions swirling around Ellison’s relationship with Trump, Kushner’s brief involvement, and Trump’s public animus toward CNN will not disappear.
If approved, the merger will reshape Hollywood — consolidating power, eliminating jobs, and creating a new giant capable of competing with Disney in every corner of the entertainment business.
If blocked, the months of drama will have been for nothing, and Warner Bros will return to the drawing board, still searching for a buyer willing to pay the price.
For now, Paramount has won the battle. The war with regulators is just beginning.
