The pm hours of Thursday, February 26 will go down as some of the most eventful and consequential in Hollywood history, full of shocking plot twists and truly high stakes. Unfortunately, the ending sucks. At the end of last year, Warner Bros. Discovery announced they’d accepted Netflix’s acquisition offer of $82.7 billion, roughly $28 a share. No one seemed to be more stunned by the deal than David Ellison, head of the newly-merged Paramount Skydance. Ellison’s responses — including an immediate hostile takeover bid — were so increasingly desperate, I genuinely wondered if it was the first time in his life anyone had ever said no to the nepo billionaire. But it seemed WBD and Netflix were holding strong, with respective studio heads David Zaslav and Ted Sarandos chummily posing together at the Golden Globes.

Still, Ellison kept throwing down offers (nevermind that Paramount Skydance is going to sh-t in front of us), until yesterday afternoon when the winds broke for him. The WBD Board determined that Paramount Skydance’s latest bid of $31 a share was a “Company Superior Proposal,” a legal term which started the clock on four business days for Netflix to prepare (and here I quote Vincent LaGuardia Gambini, esq.) “a counteroffer.” It was at this dramatic moment that I started outlining my thoughts to write up later in the evening. By the time I got home, though, this happened: instead of preparing a new bid, Netflix said, “It’s been real, bye!” Well, here’s what co-CEOs Sarandos and Greg Peters actually said as they officially withdrew their bid:

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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,” the co-CEOs said.

“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Widenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process,” they added. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

…“Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us. We wish them well in the future,” said David Zaslav, president and CEO of Warner Bros. Discovery. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”

PSKY’s latest proposal was for $31 per share, but had a number of other sweeteners, including a ticking fee payable to shareholders equal to $0.25 per quarter beginning after Sept. 30, 2026, as well as a $7 billion regulatory termination in the event the transaction does not close due to regulatory matters.

Paramount has also agreed to pay the $2.8 billion termination fee that Warner Bros. would be required to pay to Netflix to terminate the existing merger agreement.

If all goes as expected, Netflix will be on the receiving end of that $2.8 billion sooner rather than later. Netflix shares soared by more than 10 percent in after-hours trading after the decision was announced.

[From The Hollywood Reporter]

I hope James Cameron is f–king happy now! Except no, the person I’m really angry at is myself. It’s my fault that I thought there was the slightest glimmer of hope that between the choice of the bad (Netflix) or the worse (Paramount Skydance), we’d be allowed the “win” of the bad option; that we’d be entitled to anything but the worst case scenario. Not in this timeline! Of course the deal isn’t done yet. Or maybe I should say, it’s only as done as the WBD-Netflix merger deal was up until 24 hours ago. The process of Congressional approval — which Sarandos was already knee-deep in, he was even at the White House yesterday when the sh-t hit the projector — all that begins again for Paramount Skydance, and state attorneys general also have to weigh in. It’s not so much the increase to $31 a share, but the sweeteners that finally swung the WBD Board, yes? WBD now owes Netflix $2.8B for backing out, but Ellison will cover that fee. And if Congress ultimately doesn’t agree to the merger (I know, I know, I’m not holding my breath), then Ellison still pays WBD $7B just for the fun of it all. And the extra kicker? Thursday morning, before all this went down, WBD posted its fourth quarter financials for 2025 showing they LOST $252M in those three months. Yet Ellison had to cough up billions extra to secure the win. I feel like they just made us sit through a live staged reading of Succession, but with crappy actors.

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photos credit Avalon.red, Getty Images, Getty Images for Netflix