Netflix Abandons $83 Billion Warner Bros. Discovery Deal, Walks Away With $2.8 Billion Breakup Fee

Quick Facts

• Netflix withdrew from its $83 billion deal to acquire Warner Bros. Discovery after Paramount Skydance submitted a superior $111 billion bid
• Netflix received a $2.8 billion breakup fee, one of the largest in media merger history
• Netflix stock surged 13.8% following the announcement as investors celebrated the company’s financial discipline

Netflix formally abandoned its $83 billion acquisition of Warner Bros. Discovery on February 27, 2026, after declining to match a superior offer from Paramount Skydance. The streaming giant walked away with a $2.8 billion termination fee, one of the largest breakup payments in media merger history.

The dramatic conclusion unfolded when Warner Bros. Discovery’s board declared Paramount Skydance’s $111 billion all-cash offer superior to Netflix’s existing agreement. Paramount’s winning bid valued WBD at $31 per share and included the company’s linear cable channels, which Netflix’s original deal had excluded.

Netflix co-CEOs defended the decision in a statement: “We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive. This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

The withdrawal came amid mounting regulatory pressure. The Department of Justice’s Antitrust Division had launched an investigation into whether the Netflix-WBD merger would “substantially lessen competition” under federal antitrust laws. A coalition of 11 Republican attorneys general also urged the DOJ to scrutinize the deal over market concentration concerns.

Political headwinds intensified when President Trump criticized Netflix board member Susan Rice on social media, calling her “purely a political hack.” Netflix co-CEO Ted Sarandos was photographed leaving White House meetings with what observers described as “a glum look” shortly before the company’s withdrawal announcement.

Wall Street celebrated Netflix’s decision. Shares jumped 13.8% to close at $96.24 on February 27, building on earlier gains. The rally reversed a 25% decline that occurred when Netflix first announced the WBD deal in December 2025.

“Netflix investors breathed a sigh of relief,” said Robert Fishman, media analyst with MoffettNathanson Research. The breakup fee and preserved capital flexibility fueled investor optimism about the company’s disciplined approach to growth.

Netflix had originally secured its agreement with WBD on December 5, 2025, offering $27.75 per share for the studio and HBO Max streaming assets. The deal excluded WBD’s cable television channels, which Paramount’s offer included.

Warner Bros. Discovery CEO David Zaslav praised Netflix despite the failed transaction: “Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us.”

Netflix confirmed it will resume share repurchases and maintain its $20 billion annual content investment. The company emphasized its commitment to organic growth rather than major acquisitions at inflated prices.

Read more: Why did Netflix back down from its deal to acquire Warner Bros.?