Netflix Declines to Raise Offer for Warner Bros.

Rhea-AI Summary

Netflix (WBD) declined to raise its offer to match Paramount Skydance's bid for Warner Bros on Feb 26, 2026.

The WBD Board determined Paramount Skydance's proposal is a "Superior Proposal" under the merger agreement, and Netflix said matching that price was "no longer financially attractive." Netflix reiterated it will invest approximately $20 billion in films and series this year and will resume its share repurchase program.

Positive

• Planned content investment of $20 billion this year
• Will resume share repurchase program under capital allocation policy
• Management reports business is healthy and growing organically

Negative

• Declined to match Paramount Skydance's superior offer for Warner Bros
• Lost opportunity to acquire Warner Bros after negotiation

Key Figures

Content investment: approximately $20 billion 2025 revenue: $37.3 billion Prior-year revenue: $39.3 billion +5 more

8 metrics

Content investment approximately $20 billion Planned 2026 spend on films and series cited by Netflix

2025 revenue $37.3 billion WBD full-year 2025 revenue vs $39.3 billion prior year

Prior-year revenue $39.3 billion WBD full-year revenue in prior year for comparison

2025 net income $727 million WBD 2025 net income vs prior-year $11.3 billion loss

Prior-year net loss $11.3 billion WBD prior-year net loss before 2025 return to profitability

2025 Adjusted EBITDA $8.7 billion WBD Adjusted EBITDA vs $9.0 billion prior year

2025 free cash flow $3.09 billion WBD free cash flow vs $4.43 billion prior year

Net debt $29.0 billion WBD year-end 2025 net debt with net leverage of 3.3x

Market Reality Check

Price: $28.17 Vol: Volume 15,502,292 vs 20-d...

low vol

$28.17 Last Close

Volume Volume 15,502,292 vs 20-day average 23,485,417, indicating lighter-than-normal trading activity. low

Technical Shares trade above the 200-day MA, at $28.821 vs 200-day MA of $18.8, reflecting a longer-term uptrend into this news.

Peers on Argus

WBD fell 0.86% while key media peers like FOXA, FOX, NWS, NWSA and LYV showed ga...

WBD fell 0.86% while key media peers like FOXA, FOX, NWS, NWSA and LYV showed gains between 1.12% and 4.37%, indicating today’s move was more stock-specific than sector-driven.

Historical Context

5 past events · Latest: Feb 24 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 24	Paramount proposal terms	Positive	-0.9%	Paramount highlighted revised all-cash <b>$31</b> WBD bid with strong protections.
Feb 24	Board views proposal	Positive	-0.9%	WBD board said Paramount’s revised offer could lead to a Company Superior Proposal.
Feb 24	Revised bid submitted	Positive	+0.8%	Paramount confirmed submission of revised acquisition proposal and outlined conditions.
Feb 24	Receipt of proposal	Positive	+0.8%	WBD confirmed receipt of revised Paramount proposal while keeping Netflix deal in effect.
Feb 19	Earnings call timing	Neutral	-0.9%	Company scheduled Q4 and full-year 2025 earnings release and conference call details.

Pattern Detected

Recent takeover-related headlines for WBD have produced mixed reactions, with some acquisition updates aligning positively with price moves and others seeing the stock trade lower despite seemingly favorable deal terms.

Recent Company History

Over the past week, WBD’s news flow has been dominated by competing acquisition proposals from Netflix and Paramount Skydance. Multiple releases on Feb 24, 2026 detailed Paramount’s revised $31 per share all-cash offer, related ticking fees and termination protections, alongside WBD’s confirmation it was reviewing the proposal while its Netflix merger agreement remained in effect. An earlier item on Feb 19, 2026 simply set the Feb 26, 2026 earnings date. Today’s Netflix statement fits into this evolving competitive bid backdrop.

Market Pulse Summary

This announcement clarifies that Netflix will not raise its offer for Warner Bros. Discovery, framin...

Analysis

This announcement clarifies that Netflix will not raise its offer for Warner Bros. Discovery, framing the transaction as opportunistic rather than essential. Against recent 8-K data showing WBD’s $37.3 billion in 2025 revenue, a return to $727 million in net income, and free cash flow of $3.09 billion, the focus shifts to how WBD navigates competing proposals and its separation strategy. Investors may watch future filings and board communications for updates on strategic direction and deal outcomes.

Key Terms

regulatory approval, share repurchase program

2 terms

regulatory approval regulatory

"created shareholder value with a clear path to regulatory approval."

Regulatory approval is the official permission given by government agencies or authorities that allows a product, service, or business activity to be legally operated or sold. It is important to investors because receiving approval often indicates that a product has been reviewed for safety and compliance, which can influence its success and the company’s prospects in the market. Without this approval, launching or selling certain products may be restricted or prohibited.

share repurchase program financial

"Consistent with our capital allocation policy, we'll also resume our share repurchase program."

A share repurchase program is when a company buys back its own shares from the marketplace. This reduces the total number of shares available, which can increase the value of each remaining share and signal confidence in the company's prospects. For investors, it often suggests that the company believes its stock is undervalued or that it has extra cash to return to shareholders.

AI-generated analysis. Not financial advice.

HOLLYWOOD, Calif., Feb. 26, 2026 /PRNewswire/ -- Netflix, Inc. today announced that it has declined to raise its offer for Warner Bros. Netflix had earlier received notice from Warner Bros. Discovery (WBD) that its Board of Directors has determined Paramount Skydance's (PSKY) latest proposal constitutes a "Superior Proposal" under the terms of WBD's existing merger agreement with Netflix. Netflix issued the following statement in response from co-CEOs Ted Sarandos and Greg Peters:

The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we've always been disciplined, and at the price required to match Paramount Skydance's latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.

Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process. We believe we would have been strong stewards of Warner Bros.' iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S.  But this transaction was always a 'nice to have' at the right price, not a 'must have' at any price.

Netflix's business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we'll invest approximately $20 billion in quality films and series and will expand our entertaining offering. Consistent with our capital allocation policy, we'll also resume our share repurchase program.

We will continue to do what we've done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.

About Netflix

Netflix is one of the world's leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

Important Information and Where to Find It

In connection with the proposed transaction between Netflix and WBD, WBD filed a definitive proxy statement on Schedule 14A (the "Proxy Statement") with the U.S. Securities and Exchange Commission (the "SEC"). The Proxy Statement was first mailed to WBD stockholders on or around February 17, 2026. Each of Netflix and WBD may also file with or furnish to the SEC other relevant documents regarding the proposed transaction. This communication is not a substitute for the Proxy Statement or any other document that Netflix or WBD may file with the SEC or mail to WBD's stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF NETFLIX AND WBD ARE URGED TO READ THE PROXY STATEMENT, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING NETFLIX, WBD, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the Proxy Statement as well as other filings containing information about Netflix and WBD, without charge, at the SEC's website, https://www.sec.gov. The documents filed by Netflix with the SEC also may be obtained free of charge at Netflix's website at https://ir.netflix.net/home/default.aspx. The documents filed by WBD with the SEC also may be obtained free of charge at WBD's website at https://ir.wbd.com.

Participants in the Solicitation

Netflix, WBD and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of WBD in connection with the proposed transaction under the rules of the SEC. Information about the interests of the directors and executive officers of WBD and other persons who may be deemed to be participants in the solicitation of stockholders of WBD in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, is included in the Proxy Statement, which has been filed by WBD with the SEC. Information about WBD's directors and executive officers is set forth in WBD's proxy statement for its 2025 Annual Meeting of Stockholders on Schedule 14A filed with the SEC on April 23, 2025, WBD's Annual Report on Form 10-K for the year ended December 31, 2024, and any subsequent filings with the SEC. Information about Netflix's directors and executive officers is set forth in Netflix's proxy statement for its 2025 Annual Meeting of Stockholders on Schedule 14A filed with the SEC on April 17, 2025, and any subsequent filings with the SEC. Additional information regarding the direct and indirect interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the Proxy Statement regarding the proposed transaction. Free copies of these documents may be obtained as described above.

Cautionary Statement Regarding Forward-Looking Statements

This document contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Netflix's and WBD's current expectations, estimates and projections about the expected date of closing of the proposed transaction and the potential benefits thereof, their respective businesses and industries, management's beliefs and certain assumptions made by Netflix and WBD, all of which are subject to change. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "could," "seek," "see," "will," "may," "would," "might," "potentially," "estimate," "continue," "expect," "target," similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control and are not guarantees of future results, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the proposed transaction or to make or take any filing or other action required to consummate the transaction on a timely matter or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining stockholder and regulatory approvals, completing the separation of WBD's Discovery Global business ("Discovery Global") and Warner Bros. business, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies, expansion and growth of WBD's and Netflix's businesses and other conditions to the completion of the proposed transaction; (ii) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the transaction or integrating the businesses of Netflix and WBD; (iii) Netflix's and WBD's ability to implement their business strategies; (iv) consumer viewing trends; (v) potential litigation relating to the proposed transaction that could be instituted against Netflix, WBD or their respective directors; (vi) the risk that disruptions from the proposed transaction will harm Netflix's or WBD's business, including current plans and operations; (vii) the ability of Netflix or WBD to retain and hire key personnel; (viii) potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the proposed transaction; (ix) uncertainty as to the long-term value of Netflix's common stock; (x) legislative, regulatory and economic developments affecting Netflix's and WBD's businesses; (xi) general economic and market developments and conditions; (xii) the evolving legal, regulatory and tax regimes under which Netflix and WBD operate; (xiii) potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transaction that could affect Netflix's or WBD's financial performance; (xiv) restrictions during the pendency of the proposed transaction that may impact Netflix's or WBD's ability to pursue certain business opportunities or strategic transactions; (xv) failure to receive the approval of the stockholders of WBD; (xvi) the final allocation of indebtedness between WBD and Discovery Global in connection with the separation could cause a reduction to the consideration for the proposed transaction; (xvii) inherent uncertainties involved in the estimates and assumptions used in the preparation of financial projections, and inherent uncertainties involved in the estimates and judgments used to estimate the differences between WBD's Global Linear Networks segment results and the expected results of Discovery Global; and (xviii) volatility or a decline in the market price for Discovery Global common stock following the separation. Discussions of additional risks and uncertainties are contained in Netflix's and WBD's filings with the SEC, including their Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and the Proxy Statement filed by WBD in connection with the proposed transaction. While the list of factors presented here and in the Proxy Statement are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Netflix's or WBD's consolidated financial condition, results of operations or liquidity. Neither Netflix nor WBD assumes any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

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SOURCE Netflix, Inc.

FAQ

Why did Netflix decline to raise its offer for Warner Bros on Feb 26, 2026 (WBD)?

Netflix said the price required to match Paramount Skydance was "no longer financially attractive." According to the company, matching PSKY's bid would have removed the disciplined economics that guided their decision.

What did the WBD board decide about Paramount Skydance's proposal for Warner Bros (WBD)?

The WBD Board determined Paramount Skydance's proposal constitutes a "Superior Proposal." According to the company, that determination triggered Netflix's decision not to increase its offer.

How will Netflix's Feb 26, 2026 announcement affect its capital allocation (WBD)?

Netflix said it will resume its share repurchase program consistent with capital allocation policy. According to the company, buybacks will accompany continued investment in content spending and organic growth.

How much will Netflix invest in content after declining to raise the Warner Bros offer (WBD)?

Netflix plans to invest approximately $20 billion in films and series this year. According to the company, this spending will expand its slate and streaming offerings.

Does Netflix say the Warner Bros deal would have been regulatory-friendly (WBD)?

Netflix stated the negotiated transaction had a clear path to regulatory approval. According to the company, the decision was financial, not based on regulatory concerns.

What are the immediate shareholder implications of Netflix declining to match PSKY for Warner Bros (WBD)?

Netflix emphasized preserving shareholder value by not overpaying and resuming buybacks. According to the company, this supports long-term value while maintaining heavy content investment.