Netflix Backs Off of Warner Bros. Discovery Deal, Paramount to Purchase the Entertainment Giant

Netflix throws in the towel as Paramount takes first place

All eyes have been on Warner Bros. Discovery (WBD) over the past few months as, after years of controversial business decisions under David Zaslav’s shaky leadership, the company decided to put itself up for sale in 2025.

Netflix announced its intention to purchase Warner Bros. (including HBO Max) from WBD in December, but competitor Paramount Skydance quickly swooped in with a better offer: to purchase all of WBD, not just Warner Bros. It claimed that keeping the company whole would be “in the best interest of its shareholders“—never mind that the “company” has always been two brands awkwardly stitched together—and tried to override Netflix’s preexisting deal.

Well, it looks like their gambit worked. On February 26, WBD deemed Paramount Skydance’s offer superior and gave Netflix four days to sweeten its own offer. But Netflix declined to use the four days, backing out of the race almost immediately and calling the deal “no longer financially attractive.”

It’s a bit like giving up during an eBay bidding war, except instead of novelty ceramics, there are entire industries and tens of thousands of jobs on the line. Let’s dive into the full story and what this means for the future of TV.

How did TV fans get here?

Arguably, this whole nightmare began in 2022 when Discovery, Inc. ate—sorry, merged with—WarnerMedia. This new company, Warner Bros. Discovery, was doomed from the beginning. For one thing, its original concept logo looked like 2000s clipart. For another thing, it was led by Discovery’s existing CEO, David Zaslav. You know, Zaslav, one of the Big Bads of the 2023 writers’ strike?

Zaslav made a lot of controversial business decisions during his tenure at WBD, the most public of which was to cut the “HBO” from “HBO Max” and rename it as “Max: The One to Watch.” This was about as well-received as Twitter’s transformation into “X: The Everything App,” and was reversed in just a few short years.

Warner Bros. Discovery has since harmed the reputations of some of its most iconic brands, including DC and Looney Tunes, by shelving completed, long-anticipated projects. WBD also shut down the Cartoon Network offices in 2023, merging its staff with the rest of Warner Bros. Television, and pivoted hard away from anything resembling animation (or fun). You can’t even find most classic Cartoon Network shows on HBO Max anymore. And the HBO show Westworld disappeared from HBO Max and reappeared on Tubi, where it airs live rather than on demand, despite being a high-profile HBO Original.

But hey, uh, HBO is making a new Harry Potter, I guess.

As it turns out, a company can only take so many self-inflicted Ls. So when Warner Bros. Discovery announced its decision to split itself back up in 2025, I wasn’t particularly surprised. The plan was to break into two companies: Streaming & Studios and Global Networks. This was great! Splitting up a bloated corporation that probably shouldn’t have existed in the first place!

And then Netflix announced its decision to buy the Streaming & Studios segment of the business, known simply as Warner Bros., and our industry experts were skeptical. In the words of our managing editor, Mike Strayer, “Here we go again […] expect higher prices and less interesting content.” It was already a pretty foul deal for consumers, who would likely see HBO Max and Netflix merge into one ultra-powerful, ultra-expensive streaming service.

But Paramount Skydance couldn’t let that slide. Another media org becoming an entertainment superpower without it? They immediately offered to buy all of WBD, bypassing the planned separation and nullifying Netflix’s deal. This was extremely shady, and for a while, it wasn’t clear if WBD or Netflix would allow it.

Eventually, Netflix allowed Paramount to make its final bid, and WBD acknowledged that it was “superior” to Netflix’s. Paramount was just offering too much money per share, and Netflix couldn’t compete.

So now it looks like Paramount Skydance is buying up Warner Bros. Discovery for $31 per share. Let’s look ahead at what you can expect in the immediate fallout.

What does Paramount’s bid mean for the future of TV?

Short term, this is actually a good financial move for Netflix. Its stocks spiked 10% after it announced its decision to leave the table, while WBD dropped 2%. WBD even owes Netflix $2.8 billion dollars for breach of contract now, which Paramount has agreed to pay.

But that’s not the part that will impact you, the consumer … yet.

A new Frankenstein-monster of a streaming service?

The elephant in the room is that this probably means Paramount+ and HBO Max will merge into a single app with another awful name. Paramount Max? HBO+? As of writing, Paramount+ Premium costs a reasonable $12.99/mo., and HBO Max comes in at a more egregious $18.49/mo.

If the two services merge like HBO Max and Discovery+ did with the original WBD merger, how much more expensive will they become? What shows will be axed in the process? Will Cartoon Network ever regain its dignity?

Expect mass layoffs

It’s even worse for the workers. Deadline interviewed WBD staffers after a recent town hall, and one employee “noted that they have been watching in horror how David Ellison’s new regime at Paramount ‘took a knife’ to Paramount Global staff.” When mergers happen, lots of employees end up getting laid off, and this will almost certainly be the case with a Paramount/WBD merger. As with the Discovery/Warner merger, one company will consume the other, and employees will bear the brunt of the carnage.

How political power will continue to shape TV

I’ve talked a lot about WBD’s CEO, David Zaslav, but there’s another key figure in this merger. Paramount Skydance’s CEO, David Ellison, is the mastermind behind it—and he’s backed both by his father, who co-founded Oracle, and the President of the United States.

With Oracle tied so closely to one of the country’s largest entertainment conglomerates, you can expect more AI introduced in places it doesn’t belong. And with President Trump’s support, the deal will face less antitrust scrutiny and be able to jump through hoops it otherwise wouldn’t have under previous administrations. Paramount Skydance already proved its loyalty to President Trump when it canceled Stephen Colbert in 2025.

There’s also a third party supporting Paramount’s $111 billion purchase. Its original bid was financed by investment groups in Saudi Arabia, Abu Dhabi, and Qatar. At the time of writing, it’s unclear whether those three groups are still onboard, but the fact that they supported Paramount at all is worrying. Because ownership of WBD isn’t just about the Harry Potter and Game of Thrones franchises. It’s also about CNN.

Paramount Skydance already owns CBS News, and acquiring CNN will expand its influence further. Under this deal, there’s a potential for all three of its backers—the tech giant Oracle, the White House, and investment firms in the Middle East— to interfere with two of the biggest American news sources.

So what now?

Unfortunately, it’s pretty hard to find a silver lining in all of this. Entertainment companies love to distract us from monopolization by waving crossover potential in our faces, like Disney did when they finally got the rest of the Marvel heroes from Fox. I wouldn’t be surprised to see some DC heroes popping up on “Paw Patrol” in the near future, or Spock making an appearance on “Teen Titans GO!”.

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