Netflix Exits Bidding, Paving Way for Paramount's Acquisition of Warner Bros. Discovery

Netflix has exited its bid to acquire Warner Bros. Discovery, positioning Paramount Skydance as the probable new owner of WBD. Subject to regulatory approval, the merger could herald the rise of a media giant, uniting Paramount-Skydance and Warner Bros. Discovery. Over recent years, both Paramount and WBD have experienced dwindling revenues and struggled with profitability, prompting this strategic unification. Paramount believes merging could stabilize its finances, enhance its streaming service performance, and extract more value from cable television. The financial performance of both companies has been rocky, as seen in their quarterly net earnings over 2024 and 2025. Despite setbacks, Paramount remains hopeful that acquiring WBD will drive profitability through content creation, theatrical releases, and improved streaming and cable operations. A critical component of this merger could be the integration of HBO Max into the Paramount+ platform. Although Paramount+'s streaming arm, including Pluto and BET+, is not currently profitable, it has been narrowing its losses. In Q4 2025, the streaming business reported an adjusted operating income before depreciation and amortization of -$158 million, yet it managed to grow revenues by 17% year over year and increased subscribers to 78.9 million by the end of Q3.