Netflix has declined to raise its offer to acquire Warner Bros. Discovery's studio and streaming business, a move that effectively puts Paramount in a position to take over its Hollywood rival, according to a news report by PBS News.
On Thursday, after Warner's board announced that Skydance-owned Paramount's offer was superior to the agreement it had previously struck with Netflix, the streaming giant said the revised price required to complete the deal was "no longer financially attractive."
"We believe we would have been strong stewards of Warner Bros.' iconic brands," Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. "But this transaction was always a 'nice to have' at the right price, not a 'must have' at any price." reported PBS News.
Sarandos and Peters also thanked Warner leadership. Warner had repeatedly backed the deal it struck with Netflix since December. Even while announcing that Paramount's latest offer was superior earlier Thursday, the company said its board stood by its previous recommendation in favour of Netflix.
Paramount and Warner did not immediately respond to requests for comment regarding Netflix's decision to walk away. The development came after Paramount increased its rival bid for the entire company to USD 31 per share, along with other revisions.
Unlike Netflix, which sought to acquire only Warner's studio and streaming business for USD 27.75 per share, Paramount is aiming to buy the entire company. This means assets such as HBO Max, titles like "Harry Potter," and CNN could come under Paramount's ownership if the deal goes through.
A Paramount-Warner combination would merge two of Hollywood's five remaining legacy studios and their theatrical channels.
Warner's content library includes films such as "Superman," "Barbie," and "One Battle After Another," along with hit TV series like "The White Lotus" and "Succession." Paramount's lineup features titles such as "Top Gun," "Titanic" and "The Godfather," and it also owns networks including CBS, MTV and Nickelodeon, as well as the Paramount+ streaming service.
Paramount executives stated that the merger would benefit consumers and the broader industry. However, lawmakers and entertainment trade groups have raised concerns, warning that the deal would further consolidate power in an industry already dominated by a few major players.
The combined transaction has also triggered antitrust concerns. The U.S. Department of Justice has initiated reviews, and other countries are expected to follow.
To strengthen its bid, Paramount agreed to a regulatory termination fee of USD 7 billion and pledged to accelerate a previously-promised "ticking fee."
The company had earlier said it would pay 25 cents per share for every quarter the deal extends beyond the end of the year. It has now agreed to pay that amount if the deal does not close by the end of September.
The conflict over the takeover began in late 2025 when Netflix reached a "friendly" agreement to acquire WBD's premium content and streaming assets for approximately USD 83 billion.
This deal was designed to merge the two streaming giants while spinning off WBD's older cable networks into a separate entity.
However, the situation turned into a bidding war when Paramount Global (recently merged with Skydance Media) launched a massive counter-offer of USD 108.4 billion to buy the entire company outright, including the cable channels Netflix intended to leave behind.
So far, the battle has been characterised by intense legal and financial maneuvering. While the WBD board originally favoured the Netflix deal, Paramount later "sweetened the pot" to win over shareholders.
On February 10, Paramount pledged to cover the USD 2.8 billion breakup fee WBD would owe Netflix for backing out, while also offering a "ticking fee" to pay shareholders extra cash if the deal faces long regulatory delays.
