Netflix just got a little richer as a result of letting go of Warner Bros. Discovery.
On Friday, Netflix announced that Paramount Skydance had paid the streamer its promised $2.8 billion breakup fee following Paramount’s victory in the WBD bidding war (pending a public vote and subsequent regulatory approval).
According to an SEC filing, Netflix said Warner Bros. Discovery “has notified Netflix that it has terminated the Merger Agreement in accordance with its terms in order to enter into a Merger Agreement and Plan of Merger with PSKY with respect to the company’s senior proposal.”
At the time of the deal, Netflix said Paramount Skydance had paid the $2.8 billion in fees Netflix was owed under the merger agreement with Warner Bros. Discovery.
Netflix formally rejected an $83 billion increase in Warner Bros. and HBO Max Discovery’s proposed takeover on Thursday afternoon, after WBD’s board declared Paramount Skydance’s latest bid ($111 billion for all of WBD, including linear channels) to be a “better offer” than the deal it already made with Netflix.
The now-defunct Netflix deal, which also included the acquisitions of Warner Bros. and HBO Max, was worth nearly $83 billion. Paramount’s latest bid, submitted on February 24th, was a roughly $111 billion bid for the entire WBD, including its linear cable channels.
Netflix’s quick decision shocked Hollywood. The distributor had four business days, or until 11:59 p.m. ET on Wednesday, March 4, to submit a new proposal to salvage the WBD contract.
In a joint statement released Thursday, less than two hours after Warner Bros. Discovery disclosed the board’s new decision, Netflix co-CEOs Ted Sarandos and Greg Peters said, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval.” “However, we remain disciplined and decline to match Paramount Skydance’s bid as this transaction is no longer financially attractive at the price required to match Paramount Skydance’s latest offer.”
Netflix executives said, “This deal is always a ‘nice-to-have’ at the right price; it is not a ‘must-have’ at any price.”
