Netflix exits Warner Bros takeover fight, enabling Paramount advance with collective gain
The corporate chess match for one of Hollywood’s crown jewels has reached a decisive moment, with Netflix abruptly withdrawing from the $111bn battle for Warner Bros. Discovery and leaving the field to its rival, Paramount Skydance. The streaming giant’s exit marks a dramatic turn in a saga that has gripped markets and redrawn the landscape of global media.
Netflix’s decision came late on Thursday, just hours after the board of Warner Bros. Discovery formally declared a revised offer from Paramount Skydance a “Company Superior Proposal.” Paramount had lifted its bid to $31 per share for the entire company, surpassing Netflix’s earlier agreement to buy WBD’s studio and streaming assets for $27.75 per share, or $82.7 billion. In a statement, Netflix said that at the price required to match Paramount’s offer, the deal was “no longer financially attractive,” with co-CEOs Ted Sarandos and Greg Peters emphasising a commitment to financial discipline over what they called a “nice to have” acquisition.
The market’s immediate verdict was one of relief. Netflix’s shares surged 8.5% in after-hours trading, while Paramount Skydance’s stock jumped 8.7% in pre-market activity. “For Netflix investors, the reaction has been positive,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. “Management chose discipline over empire‑building, removing a major acquisition overhang that had been weighing on the shares.” Ben Barringer, head of technology research at Quilter Cheviot, argued the outcome was ultimately less disruptive than a Netflix victory would have been. “Yes, it creates a new mega streamer… but Netflix has eyes on other competitors. YouTube remains the biggest threat.”
Paramount Skydance, backed by Oracle billionaire Larry Ellison and his son David, now stands to create a media behemoth. The combined entity would control a vast library including Warner Bros. franchises like Harry Potter and Batman, the HBO cable and streaming network, CNN, and Paramount’s own assets such as CBS, MTV, and Comedy Central. This would significantly consolidate the Ellison family’s influence in global media, an expansion that has drawn scrutiny given Larry Ellison’s close ties to former President Donald Trump.
Regulatory and Political Hurdles Ahead
Despite Netflix’s withdrawal, the deal is far from sealed. Paramount Skydance claims to have cleared a key U.S. antitrust milestone, noting the 10-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on 19 February. However, significant regulatory scrutiny remains. The merger still requires approval from Warner Bros. Discovery shareholders and nods from regulators in the EU and UK. Jennifer Rie, a senior litigation analyst at Bloomberg Intelligence, noted that while “an outright block is unlikely,” remedies may be necessary and the process could take another 10-13 months.
Opposition is already mobilising. The California Department of Justice has opened an investigation, with Attorney General Rob Bonta vowing a “vigorous” review, stating the merger of “two Hollywood titans” is “not a done deal.” Democratic lawmakers have previously labelled the potential union an “antitrust disaster.” Across the Atlantic, the European Commission’s competition directorate will also weigh the implications for the European market.
Within the companies, anxiety is mounting. Staffers at CBS News and CNN are reported to be panicking about the future, fearing significant job cuts as the two news operations come under one roof. Some at CNN are nervous about the prospect of ideologically driven programming changes under the Trump-friendly ownership, with particular concern about the potential for a larger role for CBS News editor-in-chief Bari Weiss. The Bectu union, which represents UK media workers, has also voiced deep concern. “Whoever takes over Warner Bros, continuing consolidation within the creative industries is worrying,” said Philippa Childs, the union’s head. “I am concerned that the takeover will have a negative impact on jobs and add to uncertainty.” Paramount has previously suggested it could achieve $9bn in synergies and cost cuts from owning WBD.
UK Markets Look Past Political Tremors
While media dealmakers clash in Hollywood, the UK’s financial and political landscape presented a mixed picture. The Labour government suffered a striking byelection defeat in Gorton and Denton, finishing third behind the Greens and Reform UK, heaping fresh pressure on Prime Minister Keir Starmer. New data from the Office for National Statistics showed public trust in the UK government has fallen significantly since a post-election bump, with just 21.9% of adults reporting trust in the period from December 2025 to January 2026.
Yet, financial markets exhibited notable calm. Sterling held steady and UK government bond prices rallied slightly, pushing down yields. “Gilts have continued their recent outperformance, helped by an improving inflation narrative,” noted Mark Dowdin of RBC BlueBay Asset Management. The FTSE 100 index of blue-chip shares sailed to a fresh record high, breaching 10,900 points for the first time. Susannah Streeter, chief investment strategist at Wealth Club, pointed to a “breathtaking run upwards” fuelled by mining stocks and a “commodities super-cycle,” with the index now eyeing the psychologically important 11,000 mark.
In a separate appointment reflecting the government’s economic priorities, the Treasury named Katharine Braddick, a senior Barclays banker, as the next deputy governor for prudential regulation at the Bank of England. Chancellor Rachel Reeves said Braddick would bring “deep City, regulatory and policy expertise” to help “drive a competitive, growth-focused approach to regulation.” Braddick previously served as director general for financial services at the Treasury and held banking policy roles at the now-abolished Financial Services Authority.
Elsewhere in the economy, signs of strain persisted. The long-running GfK consumer confidence index fell for the first time in three months in February, dropping to -19 amid weaker perceptions of personal finances and high unemployment. In a stark illustration of corporate America’s pivot to artificial intelligence, shares in tech company Block surged 23% after it announced it was cutting 40% of its staff—more than 4,000 people. Co-founder Jack Dorsey told shareholders that “intelligence tools have changed what it means to build and run a company,” asserting a significantly smaller team using AI “can do more and do it better.”
As the dust settles on the Warner Bros. Discovery contest, analysts are assessing the new balance of power. Robert Fishman of MoffettNathanson suggested the combined “Paramount Skydance Warner Bros. Discovery — they’ll need a better name — could finally transform two subscale media companies into a more serious industry player.” For now, the market’s verdict on Netflix’s withdrawal appears clear, but the final act of this corporate drama, fraught with regulatory and human resource challenges, is yet to be written.
