Power, politics and a $2.8-billion exit: How Paramount topped Netflix to win Warner Bros.

The greeting aft Netflix clinched its woody to bargain Warner Bros., Paramount Skydance Chairman David Ellison assembled a warfare country of trusted advisors, including his billionaire father, Larry Ellison.

Furious astatine Warner Bros. Discovery Chief David Zaslav for ending the auction, the Ellisons and their squad began plotting their comeback connected that crisp December day.

To rattle Warner Bros. Discovery and its investors, they launched a three-front campaign: a lawsuit, a hostile takeover bid and nonstop lobbying of the Trump medication and Republicans successful Congress.

“There was a maestro conflict program — and it was highly disciplined,” said 1 auction insider who was not authorized to remark publicly.

Netflix stunned the manufacture precocious Thursday by pulling retired of the bidding, clearing the mode for Paramount to assertion the institution that owns HBO, HBO Max, CNN, TBS, Food Network and the Warner Bros. movie and tv studios successful Burbank. The woody was valued astatine much than $111 billion.

The streaming giant’s reversal came conscionable hours aft co-Chief Executive Ted Sarandos met with Atty Gen. Pam Bondi and a lawman astatine the White House. It was a cordial session, but the Trump officials told Sarandos that his woody was facing important hurdles successful Washington, according to a idiosyncratic adjacent to the medication who was not authorized to remark publicly.

Even earlier that meeting, the tide had turned for Paramount successful a swell of power, authorities and brinkmanship.

“Netflix played their cards well, however, Paramount played their cards perfectly,” said Jonathan Miller, main enforcement of Integrated Media Company. “They did precisely what they had to bash and erstwhile they had to bash it — which was astatine the precise past moment.”

Key to triumph was Larry Ellison, his immense $200-billion luck and his connections to Trump and legislature Republicans.

Paramount besides hired Trump’s erstwhile antitrust chief, lawyer Makan Delrahim, to backmost the firm’s ineligible and regulatory action.

Republicans during a Senate proceeding this period piled onto Sarandos with complaints astir imaginable monopolistic practices and “woke” programming.

David Ellison skipped that hearing. This week, however, helium attended Trump’s State of the Union code successful the Capitol chambers, a impermanent of Sen. Lindsey Graham (R-S.C.). The 2 men posed, grinning and giving a thumbs-up, for a photograph that was posted to Graham’s X account.

David Ellison, the president and main enforcement of Paramount Skydance Corp., walks done Statuary Hall to the State of the Union code astatine the U.S. Capitol connected Feb. 24, 2026.

(Anna Moneymaker / Getty Images)

On Friday, Netflix said it had received a $2.8-billion outgo — a termination interest Paramount agreed to wage to nonstop Netflix connected its way.

Long earlier David Ellison and his household acquired Paramount and CBS past summer, the 43-year-old tech scion and craft aviator already had his sights acceptable connected Warner Bros. Discovery.

Paramount’s assets, including MTV, Nickelodeon and the Melrose Avenue movie studio, person been fading. Ellison recognized helium needed the much robust institution — Warner Bros. Discovery — to execute his ambitions.

“From the precise beginning, our pursuit of Warner Bros. Discovery has been guided by a wide purpose: to grant the bequest of 2 iconic companies portion accelerating our imaginativeness of gathering a next-generation media and amusement company,” David Ellison said successful a Friday statement. “We couldn’t beryllium much excited for what’s ahead.”

Warner’s chief, Zaslav, who had initially opposed the Paramount bid, added: “We look guardant to moving with Paramount to implicit this historical transaction.”

Netflix, successful a abstracted statement, said it was unwilling to spell beyond its $82.7-billion connection that Warner committee members accepted Dec. 4.

“We judge we would person been beardown stewards of Warner Bros.’ iconic brands, and that our woody would person strengthened the amusement manufacture and preserved and created much accumulation jobs,” Sarandos and co-Chief Executive Greg Peters said successful a statement.

“But this transaction was ever a ‘nice to have’ astatine the close price, not a ‘must have’ astatine immoderate price,” the Netflix chiefs said.

Netflix whitethorn person miscalculated the Ellison family’s determination erstwhile it agreed Feb. 16 to let Paramount backmost into the bidding.

The Los Gatos, Calif.-based institution already had prevailed successful the auction, and had an statement successful hand. Its adjacent measurement was a shareholder vote.

“They didn’t request to fto Paramount backmost successful but determination was a batch of unit connected them to marque definite the process wouldn’t beryllium challenged,” Miller said.

In addition, Netflix’s banal had besides been pummeled — the institution had mislaid a 4th of its worth — since investors learned the institution was making a Warner run.

Upon quality that Netflix had withdrawn, its shares soared Friday astir 14% to $96.24.

Netflix Chief Executive Ted Sarandos arrives astatine the White House connected Feb. 26, 2026.

(Andrew Leyden / Getty Images)

Invited backmost into the auction room, Paramount unveiled a overmuch stronger connection than the 1 it submitted successful December.

The elder Ellison had pledged to personally warrant the deal, including $45.7 cardinal successful equity required to adjacent the transaction. And if bankers became disquieted that Paramount was excessively leveraged, the tech mogul agreed to enactment successful much wealth successful bid to unafraid the slope financing.

That committedness assuaged Warner Bros. Discovery committee members who had fretted for weeks that they weren’t definite Ellison would motion connected the dotted line, according to 2 radical adjacent to the auction who were not authorized to comment.

Paramount’s unit run had been relentless, archetypal winning implicit theatre owners, who expressed alarm implicit Netflix’s concern exemplary that encourages consumers to ticker movies successful their homes.

During the past 2 weeks, Sarandos got dragged into 2 disfigured controversies.

First, famed filmmaker James Cameron endorsed Paramount, saying a Netflix takeover would pb to monolithic occupation losses successful the amusement industry, which is already reeling from a accumulation slowdown successful Southern California that has disrupted the lives of thousands of movie manufacture workers.

Then, a week ago, Trump took purpose astatine Netflix committee subordinate Susan Rice, a erstwhile high-level Obama and Biden medication official. In a societal media post, Trump called Rice a “no endowment ... governmental hack,” and said that Netflix indispensable occurrence her oregon “pay the consequences.”

The menace underscored the dicey situation for Netflix.

Additionally, Paramount had sowed doubts astir Netflix among lawmakers, regulators, Warner investors and yet the Warner board.

Paramount assured Warner committee members that it had a wide way to triumph regulatory support truthful the woody would rapidly beryllium finalized. In a amusement of confidence, Delrahim filed to triumph the Justice Department’s blessing successful December — adjacent though Paramount didn’t person a deal.

This month, a deadline for the Justice Department to rise issues with Paramount’s projected Warner takeover passed without remark from the Trump regulators.

“Analysts judge the woody is apt to close,” TD Cowen analysts said successful a Friday report. “While Paramount-WBD does contiguous worldly antitrust risks (higher wage TV prices, little wage for TV/movie workers), analysts besides spot a cardinal pro-competitive effect: improved contention successful streaming, with Paramount+ and HBO Max representing a materially stronger counterweight to #1 Netflix.”

Throughout the battle, David Ellison relied connected enactment from his father, lawyer Delrahim, and 3 cardinal committee members: Oracle Executive Vice Chair Safra A. Catz; RedBird Capital Partners laminitis Gerry Cardinale; and Justin Hamill, managing manager of tech concern steadfast Silver Lake.

In the last days, David Ellison led an effort to flip Warner committee members who had firmly supported Netflix. With Paramount’s improved offer, respective began leaning toward the Paramount deal.

On Tuesday, Warner announced that Paramount’s woody was promising.

On Thursday, Warner’s committee determined Paramount’s woody had topped Netflix. That’s erstwhile Netflix surrendered.

“Paramount had a fulsome, 360-degree approach,” Miller said. “They approached it financially. ... They understood the regulatory situation present and overseas successful the EU. And they had a crippled program for each aspect.”

On Friday, Paramount shares roseate 21% to $13.51.

It was a reversal of fortunes for David Ellison, who appeared connected CNBC conscionable 3 days aft that warfare country gathering successful December.

“We enactment the institution successful play,” David Ellison told the CNBC anchor that day. “We’re truly present to decorativeness what we started.”

Times unit writer Ana Cabellos and Business Editor Richard Verrier contributed to this report.