Netflix Is $2.8 Billion Richer After Dumping Warner Bros. Deal

Netflix is no longer contemplating a future that includes Warner Bros., having ceded the heated M&A battle to Paramount Skydance.

On Feb. 26, Netflix abandoned its deal to buy Warner Bros.’ studios and streaming business after David Ellison’s Paramount increased its hostile bid for Warner Bros. (Photo: Netflix)

Netflix CFO Spence Neumann, speaking at the Morgan Stanley Technology, Media & Telecom Conference, reiterated that the company withdrew from the bidding for Warner Bros. because Paramount increased its offer price, Todd Spangler reported for Variety.

“The short answer is, it was all about price,” Neumann said.

“We said all along this opportunity was a nice-to-have at the right price, not a must-have at any price,” he added, echoing Netflix co-CEO Ted Sarandos’ earlier statement.

Netflix had initially struck a deal in December to buy Warner Bros.’ studios and streaming business and viewed the move as playing “offense, not defense,” Neumann said.

According to him, Netflix had a “unique view” on how to value the WBD assets.

“We went into it with a point of view on price,” he said. “When it became clear it didn’t make sense for us financially anymore,” the company bowed out.

“Now we move forward, and we move forward with $2.8 billion in our pocket that we didn’t have a few weeks ago,” Neumann said, referring to the breakup fee it received from Paramount Skydance.

On Feb. 26, Netflix abandoned its deal to buy Warner Bros.’ studios and streaming business after David Ellison’s Paramount increased its hostile bid for Warner Bros. Discovery to $31 per share, leaving Paramount the winner of the debt-fueled takeover of the media conglomerate.

Paramount Skydance paid Netflix a $2.8 billion breakup fee after Warner Bros. Discovery terminated its agreement with Netflix in favor of Paramount’s “superior” offer.