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By Peter Aitken and Gabe Whisnant
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Warner Bros. Discovery (WBD) agreed Friday to be acquired by Paramount Skydance in a $110 billion deal, according to an audio recording of a companywide town hall reviewed by Reuters.
Warner executive Bruce Campbell told employees Netflix declined to match Paramount’s revised offer, clearing the way for an agreement. The deal, which includes about $29 billion in debt, would rank among the largest media mergers in Hollywood history and create one of the world’s biggest film studios.
Why It Matter
Last year, leadership at WBD announced the intention to divest some assets of the company, putting the company's television and movie division up for sale. The company boasts an incredibly lucrative and successful library of properties, including Harry Potter, Game of Thrones, and the DC Comics universe.
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Netflix ended up agreeing to pay $83 billion for those assets, beating out David Ellison's Paramount Skydance. However, Ellison did not give up on trying to make a deal happen, and pursued a number of options, including a lawsuit against WBD in order to acquire more information about the Netflix offer, which is understood to be a cash-and-stock deal.
Ellison is interested in acquiring all of WBD, including CNN, adding a second news network to the Ellison family catalogue, which currently includes CBS. President Donald Trump has highlighted CNN's sale as a necessity should the deal take place, which has therefore alarmed critics of the president, who worry he's eliminating dissenting voices in the media by backing his allies to buy parent companies.
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What To Know
Paramount increased its offer to $110 billion for WBD, prompting Netflix CEO Ted Sarandos to visit the White House on Thursday to meet with Trump and Department of Justice (DOJ) regulators to understand the contours of the deal and figure out the viability of the deal, according to Deadline.
Ultimately, news broke later in the evening Netflix had decided to pull out of the deal to buy WBD, clearing the path for Ellison to take over the deal.
That deal has been formally agreed on Friday with the signing of the deal between WBD and Paramount Skydance, which will include the latter covering the cost of the $2.8 billion breakup fee required as a penalty for the Netflix purchase failing to materialize.
Campbell broke the news during a company townhall, according to Reuters, stressing Netflix "has the legal right to match" Paramount's offer, which the company "ultimately decided not to do," and has resulted in the formal signing on Friday.
"That's where everything stands," Campbell told those gathered.
The European Union's (EU) antitrust approval is not expected to prove any significant hurdle for the deal to complete, although California's Attorney General Rob Bonta has stressed the merger is "not a done deal."
In a post on X on Thursday, Bonta wrote the companies "have not cleared regulatory scrutiny - the California Department of Justice has an open investigation, and we intend to be vigorous in our review." Should the office find the deal violates state antitrust laws, it could potentially sue over it.
Industry analysts say the scale of such a merger would give Paramount Skydance greater leverage in an increasingly competitive streaming market, but it would also intensify concerns about consolidation in an industry already dominated by a small number of powerful players.
What People Are Saying
California Attorney General Rob Bonta on X: "Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review."
Senator Elizabeth Warren, a Massachusetts Democrat, in a statement this week: “A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families. What did Trump officials tell the Netflix CEO today at the White House? A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want. With the cloud of corruption looming over Trump’s Department of Justice, it’ll be up to the American people to speak up and state attorneys general to enforce the law.”
Director James Cameron earlier this month in a letter, in part: "I believe strongly that the proposed sale of Warner Brothers Discovery to Netflix will be disastrous for the theatrical motion picture business that I have dedicated my life’s work to,” Cameron wrote in the letter. “Of course, my films all play in the downstream video markets as well, but my first love is the cinema.”
“The business model of Netflix is directly at odds with the theatrical film production and exhibition business, which employs hundreds of thousands of Americans,” he wrote. “It is therefore directly at odds with the business model of the Warner Brothers movie division, one of the few remaining major movie studios. The U.S. may no longer lead in auto or steel manufacturing, but it is still the world leader in movies. That will change for the worse.”
Update 2/27/26, 3:25 p.m. ET: This article has been updated with additional information.
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