Perhaps February 26, 2026, will go down in the annals of time as the day the so-called ‘Streaming Wars’ became a game of chess played out in the corridors of Wall Street. After weeks of intense negotiations, Netflix officially threw in the towel in its bid to acquire Warner Bros. Discovery. But in an unexpected turn of events, the firm’s shares shot up by almost 10%, with the firm being hailed as having won the ‘war’ by retreating.
Wall Street cheers Netflix’s retreat from Warner Bros. Discovery
In an announcement, the firm’s two co-CEOs, Ted Sarandos and Greg Peters, said they did not consider their decision as an outright failure in the bid to acquire Warner Bros Discovery. The two said, while acquiring Warner Bros Discovery would have been “‘nice to have’ at the right price, not a ‘must-have’ at any price,’” they were not willing to pay the final price for the acquisition, which was $31 per share, while at the same time taking on the firm’s huge linear television debt, as well as its old cable television assets, which are not growing but declining in value.
Netflix chose to spend its money on content by committing to spend $20 billion on content in 2026 and to restart its stock buyback program. Wall Street was thrilled.
The winners of this war appear to be Paramount Global and Skydance. However, there is a catch to this whole deal. The $111 billion enterprise deal is being backed by David Ellison and his father, Oracle co-founder Larry Ellison. It is also being backed by $57.5 billion in debt from the top banks in the United States. This new company will have over $90 billion in debt, and consolidation is a given.
And then there is Washington. This deal apparently has a $7 billion termination fee to be paid should Washington DC not approve this deal. This is not chump change, even for this large a deal.
So, Paramount Skydance has apparently won this war. However, the real winners of this war were Netflix, since they got out of this deal at a great price, and their stocks rose. The biggest celebration of this war may be from the party that didn’t buy anything at all.
