Paramount Beats Netflix in Massive Warner Bros. Takeover Battle

After months of intense bidding, Paramount has successfully outmaneuvered Netflix to acquire Warner Bros. in a $111 billion deal that will reshape Hollywood. The merger will combine two of the industry's most historic studios and could result in significant job cuts while promising over 30 films annually.

In a stunning conclusion to months of corporate warfare, Paramount has successfully outbid Netflix to acquire Warner Bros. in what’s being called one of Hollywood’s most significant consolidations ever.

The streaming giant Netflix withdrew from the competition Thursday, stating the deal was no longer “financially attractive” after Paramount launched an aggressive $31 per share bid worth approximately $111 billion including debt. Netflix’s earlier offer had stood at $27.75 per share.

This latest merger continues Hollywood’s trend toward consolidation. Nearly a decade ago, the industry’s “big six” studios shrank to five when Disney absorbed most of 20th Century Fox. Now that number appears destined to drop to four major players, alongside Universal and Sony.

Netflix co-CEOs Ted Sarandos and Greg Peters released a joint statement explaining their withdrawal: “We believe we would have been strong stewards of Warner Bros.’ iconic brands. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Warner Bros. Discovery had initially supported Netflix’s December proposal right until Thursday evening, when the board simultaneously endorsed Netflix while acknowledging Paramount’s offer was “superior.”

Warner Bros. Discovery CEO David Zaslav expressed enthusiasm 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.”

Paramount Skydance’s chairman and CEO David Ellison has outlined ambitious plans to produce more than 30 films annually while maintaining both studios as separate entities. However, the company has also indicated plans to eliminate approximately $6 billion in costs through workforce reductions in “duplicative operations.”

According to SEC filings from last month, Paramount stated: “Our priority is to build a vibrant, healthy business and industry — one that supports Hollywood and creative, benefits consumers, encourages competition, and strengthens the overall job market.”

Paramount executives argue the merger will enhance their ability to compete with larger competitors, particularly in streaming services, while offering expanded content libraries to subscribers.

The announcement comes as Warner Bros. promotes its latest release, “The Bride!” Director Maggie Gyllenhaal shared her thoughts with The Associated Press Friday, saying she discovered the news through social media that morning.

“I don’t have a position but I do feel really deeply supported by (Warner Bros. Motion Pictures Chairs) Pam (Abdy) and Mike (DeLuca) and I feel that they have been taking a slightly different route than most of the other people around them,” Gyllenhaal explained. “They’ve been supporting films that are actually about something while at the same time, I think, encouraging the filmmakers who are making them to reach as big of an audience as possible. That combination is very specific and very precious.”

The timing highlights a stark performance gap between the studios. Warner Bros. earned recognition as one of Hollywood’s most filmmaker-friendly operations, securing 30 Oscar nominations this year through “Sinners,” “One Battle After Another,” and “Weapons.” Paramount received none.

Box office numbers tell a similar story. Warner Bros. films captured 21% of domestic ticket sales in 2025, including major releases like “A Minecraft Movie,” “Superman,” and “Sinners.” Paramount managed only 6% market share, with “Mission: Impossible — The Final Reckoning” as their primary driver, though it failed to crack the top 10 highest-grossing films, landing at 11th place.

Paramount recently committed to releasing at least 15 theatrical films in 2026, up from their typical eight annual releases before the Skydance partnership. However, Skydance’s track record shows heavy reliance on Tom Cruise vehicles, with “Top Gun: Maverick” as their sole billion-dollar success alongside six “Mission: Impossible” installments. Their “Terminator” franchise revival attempts proved less successful.

While Warner Bros. has found success balancing original content with franchise properties, Paramount’s strategy leans heavily toward established intellectual property including “Transformers,” “Scream,” “Sonic the Hedgehog,” and “Paw Patrol.”

Cinema United, representing movie theater operators, had strongly opposed a Netflix acquisition due to concerns about theatrical releases. However, they expressed equal worry about studio consolidation in testimony to a Senate Judiciary subcommittee in February.

“If Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious,” the organization stated. “A combination of Paramount and Warner Bros., for instance, would consolidate as much as 40% of each year’s domestic box office in the hands of a single dominant studio.”

The theater industry remains fragile since the pandemic, with annual domestic box office revenues struggling to reach pre-2020 levels of over $11 billion. Since 2020, the market has exceeded $9 billion only once.

While 30 guaranteed films annually could benefit theaters, skepticism remains about actual theatrical distribution versus streaming releases. Hollywood historian Mark Harris wrote on social media that “the idea of a Paramount-WB merger producing 30-40 movies a year is an absurd fiction.” He predicted Warner Bros. would eventually become Paramount’s “classy” label before transitioning to specialty or streaming content and ultimately disappearing.

Questions remain about the future of both studios’ streaming services and their potential bundling, similar to Disney’s approach with Disney+ and Hulu.

The acquisition also raises concerns about the fate of two historic studio lots in California, where production activity has declined significantly. Paramount’s legendary Melrose Avenue facility spans 65 acres with 30 stages, hosting productions from “Sunset Boulevard” to “Forrest Gump.” Warner Bros.’ Burbank location covers 110 acres with 31 soundstages and 11 exterior sets, home to “My Fair Lady,” “Gilmore Girls,” and “Friends.” Warner Bros. also operates a major facility in Leavesden, UK.

The deal still requires regulatory approval from the U.S. Department of Justice and international authorities, with reviews already underway.