Warner Bros Might Ditch Netflix for Paramount After All

The Warner Bros saga took another twist overnight.

Board members are now discussing whether Paramount's revised proposal could lead to a superior transaction or potentially prompt Netflix to sweeten its existing bid , according to Bloomberg's latest report. This marks the first time Warner Bros has seriously considered walking away from Netflix since December.

Nobody's made a final call yet. The board still has a binding agreement with Netflix. But the fact they're even entertaining Paramount's pitch shows how much pressure has been building behind the scenes.

What Changed?

Paramount sweetened its offer last week by adding a ticking fee of 25 cents per share for each quarter the deal fails to close beyond December 31, 2026, totaling approximately $650 million per quarter . They're also covering the $2.8 billion termination fee Warner Bros would owe Netflix if they bail.

That's real money. Not just boardroom theatrics.

The move attempts to address regulatory concerns about successfully closing a deal, though both bids from Netflix and Paramount face lengthy, contentious regulatory reviews with no guarantee of a successful outcome . Paramount wants Warner Bros shareholders to know they're serious about getting this done quickly.

The catch? Paramount didn't actually raise its $30 per share offer, which values the deal at $108.4 billion including debt . They're just adding financial sweeteners around the edges.

Netflix currently has Warner Bros locked in at $27.75 per share. Originally this was a mix of cash and Netflix stock, but they shifted to an all-cash structure in January to simplify things.

Gaming Hangs in the Balance

For gamers, this matters because Warner Bros includes studios such as Rocksteady, NetherRealm, TT Games, Avalanche Software and WB Games Montreal, along with IP such as Harry Potter, Game of Thrones and DC .

Who owns these studios will shape what happens to Mortal Kombat, the Batman Arkham series, and whatever comes next from WB's gaming division.

Netflix treats games as a strategic engine, not a merchandising and licensing afterthought , according to industry observers. They've been quietly building a games operation over the past few years. Netflix already runs game development studios and offers games directly through its streaming service.

Paramount's gaming strategy? Less clear. They own Skydance Interactive, which has made VR titles and some mobile games, but nothing on the scale of what Warner Bros operates.

If DCU films and shows move to Netflix, any connected games could also exist on the streaming service right alongside them . That could mean tighter integration between DC movies, shows, and games under one roof. Or it could mean smaller budgets and streaming-first releases that skip retail entirely.

Paramount would likely keep things more traditional. Theatrical releases, retail game launches, the usual playbook. Whether that's better for gamers depends on what you value more: experimental integration or proven models.

Shareholders Are Getting Loud

Activist investor Ancora Holdings threatened to vote against the Netflix deal and launch a proxy fight if the Warner Bros board does not engage with Paramount . They've got roughly $200 million riding on this decision and they're not staying quiet.

The firm argued that Warner Bros board now has no choice but to deem Paramount's amended offer as one that could reasonably result in a Superior Proposal . That's corporate-speak for "you need to at least talk to them or we'll sue".

Thing is, most shareholders haven't actually sided with Paramount yet. Just 42.3 million shares were tendered to Paramount at last count, less than 2% of those outstanding . So while some big players are making noise, the majority remain uncommitted.

Netflix shareholders aren't thrilled either. Netflix shares have fallen more than 40% from their June peak amid concerns about the cost and risks of the Warner Bros transaction . They're worried Netflix is overpaying for assets that might not deliver the returns promised.

What Happens Next

If Warner Bros decides to re-engage with Paramount, they would need to notify Netflix first and then try to get Paramount to increase its offer beyond $30 a share, and if Warner Bros decides Paramount's new offer was superior, Netflix would have the right to match it .

That's the dance they're facing. Warner Bros can't just ghost Netflix. There's a process. Netflix gets a chance to counter any better offer before Warner Bros can walk away.

Both Paramount Chief Executive Officer David Ellison and Netflix executives have indicated a willingness to raise their bids to secure Warner Bros . Neither side wants to lose this auction. The question is who blinks first and how high the price goes.

Warner Bros is expected to address the Paramount offer and set the date for its Q4 2025 earnings report early this week after Monday's Presidents' Day holiday . That announcement should give us a clearer picture of where the board actually stands.

The regulatory timeline adds another layer of complexity. The European Union's antitrust regulators are expected to scrutinize rival bids by Netflix and Paramount at the same time, setting up an unusual head-to-head competition review . Brussels could clear one bid quickly while bogging down the other in a lengthy investigation.

Warner Bros shareholders are supposed to vote on the Netflix deal by April. Whether that timeline holds depends entirely on what happens this week.

The Stakes for Gaming

Warner Bros Games represents one of the strongest IP collections in the industry. Top revenue-generating mobile games from the Warner Bros stable include titles such as Game of Thrones Conquest, which accumulated an estimated $960 million .

Beyond mobile, you've got NetherRealm cranking out Mortal Kombat games that consistently sell millions of copies. Rocksteady made the Batman Arkham series before stumbling with Suicide Squad. TT Games owns the Lego video game franchise. Avalanche delivered Hogwarts Legacy, which became one of the best-selling games of 2023.

None of these studios will disappear regardless of who buys Warner Bros. But their priorities will shift based on new ownership.

Netflix would push for games that feed into their streaming ecosystem. Expect shorter development cycles, lower budgets for experimental titles, and tighter connections to shows and films. That could unlock creative freedom for smaller projects while potentially constraining big-budget AAA ambitions.

Paramount would operate more like traditional Hollywood. Big theatrical releases for DC films, big retail releases for DC games. Less innovation, more proven formulas. Safer bets all around.

For now, developers at these studios are watching this unfold like everyone else. Nobody knows who their boss will be in six months.

The Warner Bros board has spent months insisting Netflix was the right choice. Now they're reconsidering. That tells you everything about how much money and pressure are flying around this deal.

Expect more twists before this resolves.