Netflix Withdrawal Sparks Senate Showdown Over Paramount’s Warner Bros. Takeover
Washington D.C., Friday, 27 February 2026.
Netflix has officially abandoned its pursuit of Warner Bros. Discovery, conceding the media giant to David Ellison’s Paramount Global after refusing to match a superior $31-per-share counterbid. While the market cheered the withdrawal—sending Netflix shares surging 15%—the focus has immediately shifted to Washington. Senator Cory Booker has summoned Ellison to testify before the Senate Antitrust Subcommittee on March 4, escalating scrutiny over consolidation in Hollywood. The deal, valued at over $110 billion including debt, faces a complex political landscape: while Democrats probe the merger’s antitrust implications, Ellison’s recent appearance at the State of the Union alongside Trump allies suggests a strategic pivot to court conservative regulators. With a shareholder vote set for March 20, the acquisition now hinges on navigating this intense legislative pressure.
Netflix Exits, Market Rallies
Netflix’s decision to walk away marks the end of a volatile bidding war, but it opens a new chapter of regulatory examination. On Thursday, February 26, the streaming giant announced it would not match Paramount Skydance’s offer, which Warner Bros. Discovery (WBD) had designated as a “superior” proposal [6]. Netflix co-CEOs Ted Sarandos and Greg Peters described the potential acquisition as “nice to have” rather than a necessity, citing financial discipline as the primary reason for declining the counterbid [1][6]. The market reacted positively to the news, with Netflix shares climbing nearly 15% in after-hours trading [6], signaling investor relief that the company avoided a costly overextension.
Political Tensions Shift Targets
The withdrawal effectively neutralizes the immediate political standoff between Netflix and the incoming administration. Previously, President Trump had threatened consequences for the company regarding board member Susan Rice’s role during the merger talks [https://wsnext.com/ff81d3b-Corporate-Governance-Media-Consolidation/], explicitly linking corporate governance to political compliance. However, the regulatory spotlight has not dimmed; it has simply shifted targets. While Netflix faced scrutiny from GOP lawmakers over perceived “leftwing ideological dogma,” the focus has now turned to the consolidation of power under the Ellison family [2][5].
Washington Pivots to Paramount
Within minutes of Netflix’s exit, Senator Cory Booker (D-NJ) issued a formal invitation for Paramount CEO David Ellison to testify before the Senate Judiciary Antitrust Subcommittee [2]. The hearing, scheduled for March 4 at 14:30 ET, was originally intended to scrutinize the Netflix-WBD transaction following earlier testimony by Ted Sarandos [1][2]. Booker’s office noted that Ellison had previously committed to appearing before the committee should Paramount’s bid prove successful, stating that next week’s session presents a “timely and appropriate opportunity” to address consolidation concerns [2]. While the Department of Justice holds the ultimate authority to sue or block the deal, lawmakers are utilizing the hearing to pressure the merging entities [2].
Strategic Alliances and Deal Economics
David Ellison appears to be navigating the conservative political landscape with strategic intent. On February 24, just days before the deal solidified, Ellison attended President Trump’s State of the Union address as a guest of Senator Lindsey Graham (R-SC) [2][4]. Despite this outreach, Senate Democrats, including Booker and Minority Leader Chuck Schumer, have sent letters to Ellison requesting the preservation of records for a potential investigation into his contacts with the Trump administration [2]. The Paramount offer, now the sole proposal on the table, values Warner Bros. Discovery at $31 per share, totaling approximately $77 billion in equity [6]. When accounting for debt, the enterprise value of the transaction exceeds $110 billion [6]. WBD shareholders are scheduled to vote on the merger on March 20, with CEO David Zaslav strongly endorsing the union as a creator of “tremendous value” [6].