Paramount pays Netflix $2.8B breakup fee in Warner deal

Paramount Skydance paid Netflix $2.8 billion on Feb. 27 after outbidding the streaming competitor to acquire Warner Bros. Discovery. The payment covered the breakup fee established in Netflix's prior agreement to buy Warner's studio and streaming operations, according to a regulatory filing.

Paramount completed its $110-billion acquisition on Oct. 6 and renamed itself Skydance Corporation. The company now controls HBO Max, Paramount+, CBS, CNN and the Warner Bros. film studio. On Sept. 21, Paramount settled an antitrust lawsuit filed in July by 12 states seeking to block the transaction.

Netflix had initially agreed on Dec. 5, 2025, to acquire Warner's studio assets and HBO Max for $27.75 per share, valuing the deal at roughly $82.7 billion including debt. Following an online negotiating window, Paramount raised its all-cash proposal from $30 to $31 per share to acquire the entire business. On Feb. 26, Warner's board declared Paramount's offer superior, and Netflix declined to submit a counterbid.

To finance the transaction, Paramount planned to issue $47 billion in new shares, fully backed by the family of tech billionaire Larry Ellison and RedBird Capital Partners. The merger agreement also included a $7 billion reverse termination fee owed to Warner if antitrust authorities had blocked the purchase.

Warner shareholders received $31 per share in cash alongside a daily ticking fee for each day elapsed after Sept. 30. Following the fee receipt, Netflix shares rose 13.75% to close at $96.24 on Feb. 27. On an Aug. 4 earnings call, Paramount Chief Strategy and Operating Officer Andy Gordon announced plans to merge Paramount+ and Warner's streaming services into a single global platform.