Streaming giant Netflix, currently engaged in a fierce war against Paramount Skydance Corp. to acquire Warner Bros. Discovery (and HBO properties), could be in huge trouble if its $72 billion deal falls through or fails to get regulatory approval.
This is because it has agreed to pay a $5.8 billion penalty in the breakup clause of its acquisition deal—a whopping 8 per cent of the deal's equity value, which is a huge increase from breakup clauses in 2024 that were typically 2.4 per cent of their deals' equity value, as per a Bloomberg report citing analysts.
However, Paramount Skydance's hostile takeover on Monday continues to threaten the deal, as Netflix's stock price on Monday fell to -3 per cent—a 28 per cent decline from its record high just six months ago, and the streaming giant's lowest since April 2025.
BREAKING: Netflix stock, $NFLX, falls -3% to its lowest level since April 2025 after Paramount launches a hostile bid for Warner Brothers.
— The Kobeissi Letter (@KobeissiLetter) December 8, 2025
Netflix is now down -28% from its record high seen just 6 months ago.
Paramount's offer values Warner Brothers at $108 BILLLION. https://t.co/V3psMipdqI pic.twitter.com/1z1tKHWYgg
Yet, Netflix assured its subscriber base in an email statement overnight after Monday that "nothing is changing today".
Paramount has offered an all-cash tender worth about $108 billion for all of Warner Bros., while Netflix is interested in only the Hollywood studios, HBO, and the streaming business.
"[Warner Bros. investors] deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” said Paramount CEO David Ellison, as per a CNBC report.
In that regard, Paramount has also upped its breakup clause to $5 billion.
Warner Bros. has said that though its board would not be modifying its previous recommendation regarding the Netflix bid, but would be advising stockholders about the Paramount bid within ten business days.
With the future of Hollywood on the line, all eyes are on Warner Bros. for its verdict, as the legacy media conglomerate will also have to pay a $2.8 billion reverse breakup fee if its shareholders vote down the deal.
On the other hand, if it were to accept a rival offer such as the one from Paramount, this $2.8 billion would effectively be pushed onto the new buyer.
