Why Netflix suddenly backed out of $72bn Warner Bros mega deal

By Tolulope Oke

Netflix has pulled out of the race to acquire Warner Bros. Discovery, clearing the path for Paramount Skydance to take control of one of Hollywood’s most powerful studios.

The decision, announced Thursday, ends months of intense bidding over the future of the entertainment giant behind blockbuster films and global TV brands.

Netflix executives said the numbers simply stopped making sense.

After Paramount increased its offer by $1 per share, Netflix declined to match the new bid, describing the deal as “no longer financially attractive” at that price.

Co-chief executives Ted Sarandos and Greg Peters stressed that the acquisition was never a “must have” deal.

“We’ve always been disciplined,” the streaming giant said, signalling that it was unwilling to overstretch financially in a high-stakes takeover battle.

Industry analysts say Netflix’s withdrawal reflects its strategy of focusing on organic growth and content investment rather than expensive legacy media acquisitions.

With Netflix out, Paramount’s revised offer has been described by Warner Bros’ board as “superior.”

If regulators approve the transaction, Paramount would gain control of HBO Max, CNN, the Food Network and several sports properties, significantly expanding its streaming and cable footprint.

Paramount already owns brands such as Nickelodeon, CBS and Comedy Central, and the merger would create a heavyweight media powerhouse capable of challenging rivals across film, television and streaming.

Chief executive David Ellison welcomed the board’s backing, saying the deal offers shareholders “superior value, certainty and speed.”

Despite the board’s preference, the deal is far from sealed.

California Attorney General Rob Bonta has warned that the merger is under active review, citing the entertainment industry as a critical sector of the state’s economy. Approval would also be required from the US Department of Justice and European regulators.

The proposed takeover has drawn political attention, especially over the future of CNN.

President Donald Trump has repeatedly criticised CNN’s coverage of his administration and previously suggested the network should be sold as part of any Warner Bros deal.

Concerns have also been raised about Paramount’s financial backing, including ties to tech billionaire Larry Ellison, a major Republican donor, and earlier involvement by Jared Kushner’s investment firm.