In a dramatic turn for Hollywood’s ever-shifting landscape, Netflix announced on February 26, 2026, that it would not match Paramount Skydance’s latest bid for Warner Bros. Discovery, effectively clearing the path for a colossal merger that could reshape the global entertainment industry. The decision, confirmed by Netflix’s co-CEOs Ted Sarandos and Greg Peters, ends months of speculation and a high-stakes bidding war between two of the world’s entertainment giants.
Paramount Skydance, led by CEO David Ellison, upped its offer to $31 per share in an all-cash deal, valuing Warner Bros. Discovery at roughly $77 billion. The total takeover bid, including Warner Bros. Discovery’s (WBD) debt, comes to more than $110 billion, according to NBC News. This proposal was deemed a “superior proposal” by WBD’s board of directors, who notified Netflix of their decision earlier on Thursday. Netflix, which had previously agreed in December 2025 to acquire select assets of WBD for $27.75 a share (about $82.7 billion), now steps aside, leaving Paramount Skydance as the sole contender for the storied media conglomerate.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Sarandos and Peters said in their joint statement, as reported by PR Newswire. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.” They emphasized that the acquisition was always a “nice to have” at the right price, not a “must have” at any price, reiterating Netflix’s commitment to prudent financial strategy and organic growth.
This decision was met with immediate approval from Wall Street. Netflix shares soared as much as 15% in after-hours trading, a clear signal of shareholder relief after the company’s stock had slumped over 20% since the initial bid for WBD was announced in December. The market’s reaction suggests investors were wary of Netflix stretching itself too thin in an already volatile media environment.
Paramount Skydance’s bid, meanwhile, was not just larger—it promised greater certainty. The offer included a $7 billion reverse termination fee if regulators block the deal, providing a safety net for WBD in case the merger falters due to antitrust concerns. Paramount also pledged to reimburse WBD for any costs incurred by canceling its agreement with Netflix, according to NBC News. “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer,” Ellison said, adding that the deal would offer “certainty and speed to closing.”
Still, the deal is not finalized. WBD shareholders are scheduled to vote on the matter on March 20, 2026, and the board could formally terminate the Netflix agreement as early as Friday, a person familiar with the matter told NBC News. Regulatory approval also looms large, with federal antitrust enforcers expected to scrutinize the union of two major Hollywood powerhouses. Paramount Skydance has signaled its willingness to testify before Congress if required, and a Senate Judiciary subcommittee hearing on the matter is already scheduled for March 4.
The scope of the potential merger is staggering. Paramount Skydance owns CBS News, and the combination would bring together CNN, HBO, Showtime, HBO Max, and Paramount+ under one corporate roof. This consolidation would unite some of the most recognized brands in entertainment and news, raising both excitement and concern across the industry. As reported by NBC News, CBS News itself has been undergoing a transformation under editor-in-chief Bari Weiss, with controversial editorial decisions already making headlines. The merger could further reshape the media landscape, with implications for journalistic independence and competition.
Warner Bros. Discovery CEO David Zaslav expressed enthusiasm about the deal’s potential. “Once the WBD board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” he said. Samuel Di Piazza, WBD’s chairman, echoed this sentiment, stating he was “extremely proud of the rigorous process this Board has run over the past five and a half months that has led us to the cusp of combining these two storied companies and the excitement it will bring to audiences for many years to come.”
The road to this moment has been anything but smooth. Paramount Skydance sparked the bidding war last fall with a series of unsolicited offers, all initially rebuffed by WBD, which eventually agreed to sell parts of the company to Netflix. Netflix, for its part, actively lobbied for its bid, with Sarandos even testifying at a Senate Judiciary subcommittee hearing in February 2026. He argued that the Netflix-WBD deal would “create more economic growth,” and insisted, “This is not a typical media merger where you end up with what’s called the Noah’s Ark problem — two of everything. We are buying a company that has assets that we do not, and we will keep investing in those.”
Political intrigue has swirled around the proceedings as well. Ellison was seen in Washington this week attending President Donald Trump’s State of the Union address as a guest of Senator Lindsey Graham, while Sarandos was spotted at the White House. Trump has sent mixed signals about the merger, at times praising Netflix’s leadership while also suggesting a Netflix-WBD combination “could be a problem” due to potential market dominance. Paramount’s deep ties to Washington and the Ellison family’s influence have only added to the drama.
Not everyone is convinced that the Paramount Skydance deal is a panacea. Some entertainment industry groups and lawmakers have raised concerns that uniting two major Hollywood studios could undermine competition. Mario Gabelli, a prominent WBD investor, told NBC News that the board “finally woke up and did the math” on Paramount’s revised offer, calling it the superior valuation for shareholders. Nevertheless, antitrust scrutiny is all but certain, and the industry will be watching closely as regulators weigh the potential impact on consumers, content creators, and market competition.
For Netflix, the decision to walk away is as much about long-term strategy as it is about immediate financial discipline. The company announced plans to invest approximately $20 billion in new films and series in 2026 and to resume its share repurchase program, signaling confidence in its organic growth prospects. “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value,” Sarandos and Peters stated.
As the dust settles, all eyes are now on the upcoming shareholder vote and the regulatory hurdles ahead. The Paramount Skydance-Warner Bros. Discovery merger, if approved, promises to usher in a new era for Hollywood—one that will be closely watched, hotly debated, and, without question, deeply consequential for the future of entertainment.