Netflix isn’t buying Warner Bros. after all — Paramount is

Netflix’s plan to snap up Warner Bros. for $82.7 billion has been successfully foiled by rival Paramount Skydance, following an unusual bidding war. According to a report from Reuters, Warner Bros. Discovery has agreed to be acquired by Paramount Skydance as part of a $110 billion deal that was signed Friday morning.

Warner Bros. Discovery’s board of directors said Tuesday that a revised pitch from Paramount Skydance had been deemed a “company superior proposal” compared to what Netflix was offering in its deal. WBD execs gave Netflix a few days to respond, and Netflix ultimately said, “No, thanks. We’re good.” On Thursday, Netflix declined to fork over any more cash.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix

co-CEOs Ted Sarandos and Greg Peters said in a statement. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”

Paramount is on the hook for a $2.8 billion termination fee that Warner Bros. owed Netflix for backing out of the previous deal; and Paramount raised a separate termination fee it would have to pay if the deal failed to secure regulatory approval to $7 billion, up from $5.8 billion. Paramount’s offer to buy out Warner Bros. Discovery includes a staggering $29 billion in debt, which will ultimately mean cost-saving cuts at the combined Paramount Skydance Warner Bros. Discovery, should everything work out.

Netflix and Warner Bros. announced a buyout deal in December, which would have given Netflix ownership of WB’s treasure trove of IP, including the DC Universe and film and TV rights to Harry Potter, as well as HBO, the streaming service HBO Max, and Warner Bros. itself, a 102-year-old movie studio and theatrical distributor. The deal would have also included Warner Bros. game division (home to Mortal Kombat and Harry Potter games), but not Warner Bros. Discovery’s TV networks.

In the wake of that announcement, Paramount Skydance tried to swoop in and pay more, with the TV networks included. Paramount’s bid was backed by the Ellison Family — David Ellison runs Paramount, and his billionaire dad Larry Ellison is the founder and CTO of Oracle — and RedBird Capital. It also included funding from the private equity firm owned by Jared Kushner, who is U.S. President Donald Trump’s son-in-law, and Saudi Arabia, Qatar, and the United Arab Emirates, which have billions of dollars in investments in Trump’s family business. Based on that, don’t be surprised when the Paramount Skydance bid for Warner Bros. Discovery just sails through antitrust regulation.