The bidding war is over.

After at least nine attempts to impress the HBO parent, Paramount Skydance Corp. has swiped Warner Bros. Discovery Inc. from Netflix Inc.

Warner Bros. Discovery board said Thursday that Paramount Skydance’s revised proposal was “superior” to the existing Netflix agreement, turning tides against the Los Gatos-based streaming giant.

Despite having four business days to either match or up its bid, Netflix pulled out of the race within hours, saying in a statement that “the deal is no longer financially attractive.”

Netflix Co-Chief Executives Ted Sarandos and Greg Peters said: “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Netflix originally agreed to pay $82.7 billion in cash – at $27.75 a share – for Warner Bros. Discovery’s studios and streaming division, plus any retained equity in Discovery Global, Warner’s global networks spinoff.

Warner Bros. Discovery’s entire business could now be in the hands of Paramount, who has offered last week $31 per share and a daily ticking fee of $0.25 per quarter after Sept. 30 this year. It also offers a $7 billion regulatory termination fee in case the transaction doesn’t close due to regulatory issues and a $2.8 billion compensation for Warner Bros. Discovery to cancel the Netflix agreement.

“Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” Warner Bros. Discovery Chief Executive David Zaslav said in a statement. “We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery.”

Following Warner Bros. Discovery’s board determination on Paramount Skydance’s latest offer, Chief Executive David Ellison said that his company is “pleased WBD’s board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”

‘Brutal’ on Hollywood

Having started the bidding war for Warner Bros. Discovery last September with an unsolicited offer, it seemed Paramount finally got what it wanted at a $77 billion price tag. That’s despite leveraging massive debt for itself and taking on even more from its new potential partner in merger, who ended the financial year with $29 billion of red ink. Court Stroud, a professor of integrated marketing at New York University, said that not only was Paramount after Warner Bros. Discovery’s enormous intellectual property library, but it also wants audience data from the highly popular streaming and cable services to reach among the ranks of giants such as Netflix or The Walt Disney Co.

“Data is more valuable today than petroleum, and wars are fought over petroleum.” Stroud said. “(Data from cable networks and HBO Max from the deal) could help Paramount leapfrog up the ladder of competitiveness using data to try to target consumers.”

Industry professionals are also bracing themselves for wide-ranging job cuts now that Paramount got the deal, which would be “brutal” on L.A.’s already struggling entertainment industry, Stroud said.

“If Paramount takes it over, there will be huge amount of layoffs trying to consolidate and cut costs,” he said. “I’ve been reading from various analysts saying, the only way that this makes any financial sense, is (Paramount) have to be able to look at major synergies and lots of content cuts.”

Paramount stock jumped 10.04% to close at $11.18 per share on Thursday, with after marketing trading hitting $11.99 around the time of announcement. Netflix stock also rose to $95.19 after market, a 14.45% increase from opening. Warner Bros. Discovery dropped slightly at 2.6% after market to land at $28 per share.

Earnings insight

In its winning bid, Paramount agreed to a “material adverse effect” clause that excludes the performance of Warner Bros. Discovery’s global networks business. The clause typically allows a buyer to reconsider a merger if a significant or unforeseen negative event happens, such as financial underperformance.

According to fourth-quarter earnings released last week, Warner Bros. Discovery’s linear networks revenue fell 12% to land at $4.2 billion, resulting from a drop in domestic pay TV subscribers and the absence of the latest NBA season causing advertising sales to drop. With Paramount’s willingness to ignore the network’s performance, this might just be the “it” factor that sealed the deal in Paramount’s favor.

“Warner Bros. Discovery’s earnings are yet another demonstration of what has been going on in the media landscape,” said Seeking Alpha analyst Louis Gerard. “The company has to balance its currently thriving streaming business against a shrinking cable TV empire.”

Paramount also released fourth quarter earnings last week, with total revenue growing 2% at $8.15 billion and Paramount+ streaming service growing 17% year-over-year to $1.84 billion and subscriber count rising 4% to 78.9 million. Despite an operating loss of $339 million – a $573 million net loss – its shares were surging in early open market trading on Thursday, finding itself a top gainer on the S&P 500 Index.

Netflix has been knee-deep in regulatory muck and increasing pressure from the current administration. Sarandos visited the White House on Thursday to discuss his company’s pursuit. His meeting came after President Donald Trump demanded in a post on Truth Social that Netflix fire Susan Rice – former national security adviser – from its board, or “pay the consequences.”