Netflix Bows Out of $111B Warner Bros Auction as the Ellison Bros Expand Their Hollywood Grip

Netflix just looked at a $111 billion bar tab… and said, “Yeah, we’re good.”

After months of Hollywood chest-thumping, White House field trips, and fighting against the world’s biggest nepobaby (read: David Ellison)... Netflix officially walked away from its deal for Warner Bros. Discovery.

Why?

It’s actually pretty simple… because Paramount Skydance rolled up with a bigger suitcase of cash.

Earlier this week, Paramount bumped its all-cash offer to $31 per share for the entire WBD empire… including the studio, HBO streaming platform, CNN, TNT, the whole cable-TV fossil collection. That topped Netflix’s $27.75 per share deal for the studio and streaming assets.

And here’s the “holy overpay” insanity of it all… To win this new deal, Paramount agreed to: pay a $2.8B breakup fee WBD would owe Netflix, put a $7B termination fee on its own back if regulators block the deal, and secure $57.5B in committed debt financing.

Translation: “We’re not bluffing. Here’s the money. And the backup money.”

And despite some of the narratives trending right now on Twitter, this wasn’t a buzzer beater winner moment… Netflix had four business days to counter. That’s 96 hours for leadership to come back with a counter offer.

They didn’t.

Ted Sarandos and Greg Peters essentially said: “Cool company. Love the brands. Not at that price.”

If I had to guess, Wall Street absolutely loved that grown up energy considering Netflix shares popped 10% in response.

Meanwhile Warner Bros actually dipped (-1%) while Paramount gained 6%.

And every Netflix shareholder exhaled like they just avoided buying a timeshare in 2007.

Ironically enough, this whole bidding war had more plot twists than the final season of anything HBO produced.

Paramount CEO David Ellison (armed with his dad’s yacht money) spent months escalating bids, threatening proxy fights, and bringing presidential guest-list optics into the mix.

Headlines were dropping every day without anything actually happening that at one point I just decided to stop covering the story until something actually happened. That day was today.

But in the end? Discipline won. Netflix reminded everyone that this was a “nice-to-have”… not a “must-have.”

They’re already spending $20B this year on content. They’ve got 325+ million subscribers globally. And investors clearly preferred: “Stick to your lane” over “YOLO $82 billion on Game of Thrones and Batman.”

As for Paramount, the Ellison’s now get control of one of Hollywood’s biggest libraries including CNN, HBO, Warner Bros, and Countless Studios. That’s a lot of intellectual property under one roof. Of course, we’ll still have to wait if regulators try to block this. If so, we might be back to square one.

But for now? Netflix just proved that sometimes the biggest flex in M&A… Is walking away.

Larry Ellison could never…

At the time of publishing this article, Stocks.News holds positions in Netflix as mentioned in the article.