The management of Netflix explained its refusal to raise the bid by stating that the deal under the proposed terms is no longer financially beneficial for them.
Control over Warner Bros., as well as its films and media platforms, could significantly change the media industry. Last December, Warner Bros. agreed to a proposal from Netflix for a partial acquisition of its assets in a deal worth about $82 billion, including debt.
Paramount previously made a similar offer, which was rejected, but this week presented an improved offer, increasing the price by $1 per share.
“We are confident that the deal reached will provide Warner Bros. shareholders with significant benefits and confidence in a swift completion of the deal,” said Netflix co-CEOs Ted Sarandos and Greg Peters, adding that they have always adhered to financial discipline.
These comments were made just hours after Sarandos visited the White House.
Thus, a months-long struggle comes to an end, the outcome of which could radically change the face of Hollywood if the deal receives regulatory approval.
However, California Attorney General Rob Bonta soon stated that the merger question is “not yet resolved.” He noted that the California Department of Justice is conducting an investigation and they intend to examine it thoroughly.
Bonta had previously emphasized that his department would closely scrutinize any deals involving Warner Bros., given the significance of the entertainment industry to the state’s economy.
Additionally, Paramount will require approval from the U.S. Department of Justice and European regulators.
If the deal between Paramount and Warner Bros. goes through, it could have serious implications for CNN, one of the largest news brands in the U.S., as Warner Bros. is its parent company.
Paramount, aiming to become a leading studio in Hollywood, is receiving support from billionaire Larry Ellison and is managed by his son David.
Interest in Paramount's offer has increased, partly due to connections with U.S. President Donald Trump and his backer Larry Ellison, who is a major donor to the Republican Party. Trump has criticized CNN for its coverage of his policies and has suggested the need for its sale in the event of a deal with Warner Bros., calling the channel's management “corrupt or incompetent.”
CNN CEO Mark Thompson urged employees not to rush to conclusions about the company's future following reports of a potential deal with Paramount.
The BBC also reached out to CNN for comments.
Initially, Paramount's offer received support from Jared Kushner, Trump’s son-in-law, through his investment company, raising concerns about the president's influence over the deal. However, his company, Affinity Partners, withdrew from the project in December due to increased scrutiny of the deal.
The merger of Paramount and Skydance in 2025 also drew public attention during negotiations with the Federal Communications Commission during the Trump administration, which was set to approve the deal.
During negotiations, Paramount agreed to a $16 million concession on behalf of CBS News after Trump sued the network for interference in the elections through an interview with Kamala Harris.
The merger of the two studios also led to management changes and layoffs at CBS News.
On Thursday, David Ellison, CEO of Paramount, positively assessed the Warner Bros. board's decision to accept the improved offer, noting that it guarantees the company's shareholders “favorable terms and confidence in the completion of the deal.”
If the deal is approved, Paramount will acquire the streaming service HBO Max, as well as CNN, Food Network, and several sports channels.
Currently, Paramount already manages brands such as Nickelodeon, CBS, and Comedy Central.
Many in Hollywood view the competition between Netflix and Paramount as a battle with no clear winner. Critics fear that the legendary studio may be lost to the streaming giant, which could negatively impact theaters. However, the merger with Paramount also raises concerns due to the alleged political connections with the Trump administration, raising worries about CNN's future.
The sale of Warner Bros. will have a significant impact on the entire industry and is likely to lead to layoffs in a region already suffering from reduced production capacity.
In December, Warner Bros. confirmed that it had reached an agreement to sell its film and streaming assets to Netflix for $27.75 per share, totaling about $82 billion (£61 billion), including debt.
Warner Bros. planned to spin off the remaining part of the business, including traditional television channels and CNN, as an independent company.
However, in its latest attempt, Paramount raised the offer to $31 per share in cash, exceeding the previous price of $30 per share.
The company also agreed to pay $7 billion in case the deal is canceled and to assume $2.8 billion that Warner Bros. committed to pay Netflix in the event of a merger failure.
