Netflix (NASDAQ: NFLX) has declined to raise its offer for Warner Bros. Discovery (NASDAQ: WBD), effectively conceding the media giant to a rival bid from Paramount Skydance (NASDAQ: PSKY), according to market sources. The decision triggered a 13% surge in Netflix shares during after-hours trading, as investors applauded the streaming pioneer’s restraint amid escalating deal costs.
The decision follows Warner Bros. declaring Paramount’s all-cash offer of $31 per share as the “superior proposal,” surpassing Netflix’s earlier terms. This activated a four-day window for Netflix to counter, but the company opted out, paving the way for Paramount, backed by Skydance Media’s David Ellison, to claim victory. Polymarket bettors now assign a 54% probability to Paramount closing the deal, while the odds of Netflix sealing a Warner acquisition by year’s end have plummeted to 23%, down 37% in recent trading.
The retreat will cost Warner Bros. Discovery a hefty $2.8 billion termination fee, which will be awarded to Netflix in connection with WBD breaking the merger agreement that was in place. “This is a win for Netflix’s balance sheet,” one trader noted on social media. Paramount’s proposal includes a $7 billion regulatory backstop, de-risking the transaction amid antitrust scrutiny.
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For Warner Bros., the outcome delivers the premium its board sought after months of negotiations. Shares of the indebted media conglomerate, home to HBO and DC Comics, rose modestly in response. Paramount, meanwhile, positions itself as a consolidated powerhouse, blending its Paramount+ streamer with Warner’s content library.
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