Paramount paid Netflix $2.8 billion to walk away from its $82.7-billion Warner Bros. deal — and Netflix stock jumped 14%

Netflix gave up on buying Warner Bros. Discovery's studio and streaming business on Feb. 26. By the next day, Paramount Skydance, the company that outbid it, paid Netflix $2.8 billion .

The money was a breakup fee written into Netflix's own deal with Warner, and Paramount covered it as part of its winning bid, according to a Warner Bros. Discovery securities filing .

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Paramount closed its $110-billion takeover on Oct. 6 and renamed itself Skydance Corporation . It now owns HBO Max, Paramount+, CBS, CNN and the Warner Bros. film studio, which means two rival streaming services answer to one owner. On Sept. 21, Paramount settled an antitrust lawsuit that 12 states had filed in July to stop the merger.

How Netflix ended up with Paramount's money

Netflix agreed to pay $27.75 a share for Warner's movie and TV studios and its HBO Max streaming service on Dec. 5, 2025. Counting debt, the deal was worth about $82.7 billion . And under the contract , Netflix would owe Warner $5.8 billion if regulators blocked the sale. Warner would owe Netflix $2.8 billion if it walked away for a better offer.

Paramount had initially made six offers to Warner before taking a $30-a-share, all-cash bid straight to Warner shareholders in December, according to its tender offer documents . Paramount wanted all of Warner Bros. Discovery . Netflix's deal left out a separate company that would hold networks including CNN, TNT Sports and Discovery .

On Feb. 17, Netflix agreed to let Warner negotiate with Paramount for one week, through Feb. 23, Warner said in a press release . The two companies held talks online over the weekend that followed, Variety reported . Paramount came away offering $31 a share , up from the $30 it had been offering.

Paramount had already agreed, in an earlier version of its bid , that it would pay the $2.8 billion owed to Netflix instead of Warner. Its final deal also promised Warner $7 billion if regulators stopped the merger.

When the deal was announced, Paramount planned to raise $47 billion by selling new shares to help pay for Warner. The family of tech billionaire Larry Ellison and investment firm RedBird Capital Partners committed to back that sale in full, according to the merger announcement .