Paramount (PSKY) Stock Jumps 6% After Netflix Walks Away from Warner Bros Discovery Deal

TLDR

Table of Contents

Warner Bros Discovery’s board has designated Paramount Skydance’s $111bn offer as the “superior” bid over Netflix’s competing proposal
Netflix has pulled out of the race, citing the $31 per share price makes the deal “no longer financially attractive”
The Paramount offer includes WBD’s entire portfolio, featuring HBO, CNN, and major franchises such as Harry Potter and Batman
Major regulatory hurdles remain, with California’s Attorney General and federal/European regulators continuing to examine the deal
Staff at CBS News and WBD have raised significant concerns about job cuts and editorial independence under Ellison control

Paramount Skydance has cleared a major hurdle in its bid for Warner Bros Discovery after Netflix chose to walk away from the competition, sending Paramount shares up 6% in after-hours trading.

Paramount has won the bidding war for Warner Bros. after Netflix withdrew, saying that the deal was no longer financially attractive.
Paramount will now own the following:
— HBO / HBO Max
— CNN
— CBS
— DC Studios
— Cartoon Network
— Adult Swim
— Paramount+
— Nickelodeon… pic.twitter.com/utXHZ33Hdn
— FearBuck (@FearedBuck) February 26, 2026

Netflix made its announcement Thursday, confirming it would not match Paramount’s $31-per-share offer after WBD’s board deemed it the “superior” proposal. In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said the increased valuation made the deal “no longer financially attractive.”

The withdrawal marks the end of months of intense bidding that began when Paramount first approached WBD last September.

Paramount Skydance Corporation Class B Common Stock, PSKY

Paramount’s $111bn offer covers all of WBD’s assets — spanning HBO, CNN, and prized intellectual property including the Harry Potter and Batman universes. Netflix’s earlier $83bn proposal from December targeted only WBD’s studio divisions and streaming services.

The Ellison family, which combined Skydance with Paramount last year, would gain control over CBS News, 60 Minutes, and CNN if this merger proceeds.

WBD’s CEO David Zaslav applauded the deal, saying it “will create tremendous value for our shareholders.”

Netflix stock jumped 8.5% in extended trading, suggesting investors are relieved the streaming company avoided a transaction with significant antitrust risks.

Regulatory Challenges Loom

The deal is nowhere near completion. It still requires sign-off from the US Department of Justice and European competition authorities.

California Attorney General Rob Bonta confirmed his office has an ongoing investigation and will conduct a “vigorous” examination. “Paramount/Warner Bros is not a done deal,” he posted on social media.

Paramount sweetened its bid by raising the per-share offer by $1 from its December proposal, adding a $0.25-per-share quarterly dividend if the deal stretches past September, and including a $7bn termination fee should regulators block it.

Paramount also agreed to cover the $2.8bn breakup fee WBD would owe Netflix for walking away from their original deal.

Employee Anxiety Grows

Employees at CBS News and WBD have reacted to the news with significant concern. Staff expect that merging two major news organizations will trigger layoffs as overlapping roles are eliminated.

Several employees have expressed worry about Bari Weiss, appointed CBS News editor-in-chief last October, potentially taking on greater authority. Weiss has no prior television news experience, and her leadership has generated mixed reactions.

One CBS News producer warned the merger would be “a disaster for the people who work at both companies.”

Seth Stern from the Freedom of the Press Foundation issued stern warnings, arguing that Ellison would prioritize business interests over journalistic integrity.

Political dynamics have also entered the picture. Trump, who has connections to Larry Ellison, has publicly weighed in on the bidding war several times. David Ellison attended Trump’s State of the Union address Tuesday as Senator Lindsey Graham’s guest.

WBD has planned an all-staff town hall for Friday morning. In a Thursday memo, CNN chief Mark Thompson urged employees not to jump to conclusions.

Paramount stock rose 6% in after-hours trading following the announcement.