Ellisons Secure Warner Bros. Discovery After Netflix Bows Out

Ellisons secure Warner Bros. Discovery after Netflix exits

Last updated: Feb. 26, 2026

Netflix (NFLX) has formally abandoned its previously announced agreement to acquire Warner Bros. Discovery (WBD), citing that countering a late, revised bid from Paramount Skydance was "no longer financially attractive." Warner Bros. Discovery's board concluded that Paramount Skydance's proposal, backed by David and Larry Ellison, represented a superior path forward and shifted corporate direction after months of negotiations with Netflix.

Key facts

• Date: Feb. 26, 2026
• Target: Warner Bros. Discovery (WBD)
• Withdrawn bidder: Netflix (NFLX)
• Competing bidder: Paramount Skydance (backed by David and Larry Ellison)
• Public statement: Netflix described countering Paramount's offer as "no longer financially attractive."

Transaction context and timeline

Warner Bros. Discovery spent months in a transaction process that at one point included an agreement with Netflix. The board evaluated competing proposals and determined that Paramount Skydance's revised offer better met the company's strategic and financial objectives. The shift followed a late-stage escalation in bidding that prompted Netflix to reassess the economics of the deal and withdraw.

This sequence—months of negotiation, a late revised proposal, and a strategic board determination—is consistent with high-stakes media M&A where competing bidders can alter the competitive landscape quickly and change the perceived value of strategic combinations.

Why the board switched

• Superior proposal: The board judged Paramount Skydance's proposal to be superior to the previously negotiated Netflix agreement on terms relevant to Warner Bros. Discovery's long-term value and governance.
• Fiduciary duty: Boards must evaluate competing bids to maximize shareholder value; a revised, materially improved offer can justify terminating an existing agreement.
• Financial trade-off for bidders: Netflix concluded that escalating its bid to match or top Paramount's revised proposal was not sufficiently accretive, calling the economics "no longer financially attractive." That calculus likely incorporated cash deployment, integration costs, and shareholder return trade-offs.

Strategic implications for stakeholders

Investors and analysts should consider the following implications:

• Warner Bros. Discovery shareholders: A superior bid typically aims to provide higher immediate consideration or better strategic positioning. The board's decision suggests the Paramount Skydance proposal met or exceeded those thresholds.
• Netflix (NFLX): Exiting the deal frees Netflix to redeploy capital to core streaming operations, content budgets, or shareholder returns rather than pursuing a large-scale media consolidation that the company judged unattractive at the revised terms.
• Paramount Skydance and Ellison backing: Backing by high-profile investors can change transaction dynamics, signaling deep-pocketed support for a go-private or transformative deal structure. This can increase certainty of close if financing and regulatory conditions are met.

Market and regulatory considerations

• Regulatory review: Large media mergers typically trigger regulatory scrutiny, including antitrust review. Any pending or prospective transaction involving Warner Bros. Discovery will need to navigate those processes before closing.
• Financing and conditionality: A superior proposal still faces execution risk—financing commitments, shareholder approval, and regulatory clearances are standard conditions.

Investor playbook — short- and medium-term actions

• Risk assessment: Institutional investors should reassess exposure to WBD and NFLX positions in light of deal uncertainty and potential shifts in corporate strategy.
• Scenario planning: Prepare for outcomes including a completed Paramount Skydance transaction, a re-negotiation with other bidders, or a return to independent operations for WBD.
• Liquidity and hedging: Hedging strategies may be appropriate around anticipated corporate announcements, regulatory milestones, or financing updates.

Quotation-ready summary statements

• "Netflix has abandoned its agreement to acquire Warner Bros. Discovery, stating that countering Paramount's latest offer was 'no longer financially attractive.'"
• "Warner Bros. Discovery's board determined that a revised Paramount Skydance proposal, backed by David and Larry Ellison, was a superior path forward."

Analyst considerations and next steps

• Monitor official WBD corporate filings and proxy materials for details on the Paramount Skydance proposal structure, deal consideration, and any special committee findings.
• Watch for formal withdrawal filings or amendments from Netflix (NFLX) and any subsequent regulatory submissions tied to the Paramount-backed bid.
• Evaluate capital allocation impacts for NFLX if the company redirects intended acquisition funds to content, international expansion, or shareholder returns.

Bottom line

As of Feb. 26, 2026, Warner Bros. Discovery's board has pivoted from a negotiated agreement with Netflix to a superior proposal from Paramount Skydance backed by David and Larry Ellison. Netflix has walked away rather than escalate economically, framing the decision as a business judgment that counterbidding was "no longer financially attractive." The outcome reshapes strategic options for WBD, reorients capital strategy for NFLX, and places regulatory and financing milestones at the center of the next phase.

Action items for market professionals

• Reassess WBD and NFLX exposure and update valuation models to reflect deal uncertainty and potential premiums.
• Track regulatory filings and investor presentations for specific deal terms and closing conditions.
• Prepare trading protocols for volatility around milestone announcements and potential reopenings of the bidding process.