Netflix After the WBD Deal Collapse

One of the biggest stories in the entertainment industry so far in 2026 is Netflix (NASDAQ: NFLX) missing out on its proposed acquisition of parts of Warner Bros. Discovery.

On Dec. 5, 2025, Netflix announced it had signed a deal to acquire the Warner Bros. studio and other entertainment assets from Warner Bros. Discovery (NASDAQ: WBD) for $27.75 per share, with a total enterprise value of $82.7 billion. This set off a complex high-stakes bidding war with Paramount Skydance (NASDAQ: PSKY), which submitted its own competing offer.

On Feb. 26, Netflix announced that it was declining to raise its offer, leaving Warner's board to accept a superior offer from Paramount. The entire Warner Bros. Discovery company is now being acquired by Paramount Skydance for $31 per share, or about $110 billion of total enterprise value.

In an interview with Bloomberg on March 1, Netflix co-CEO Ted Sarandos said it was unlikely Netflix would pursue another studio acquisition, saying, "We are builders, not buyers." That's something co-CEO Greg Peters said back in October 2025 when rumors were building about Netflix trying to buy parts of Warner Bros. Discovery.

Here are key takeaways from the end of Netflix's pursuit of Warner Bros. and what it might mean for investors in this media stock.

Image source: Getty Images.

Netflix might be better off

Was losing the Warner deal a "loss" for Netflix? Maybe not. The streaming giant's stock is up 5.6% year to date as of market close March 6 and about 17% since Feb. 26. Netflix even got paid a $2.8 billion breakup fee by Paramount Skydance.

Meanwhile, Paramount Skydance stock is down about 10% year to date, and its credit rating was cut to "junk" status on March 2 by Fitch Ratings due to concerns about Paramount Skydance's rising debt levels and uncertainties related to the acquisition.

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Missing out on the WB deal could be good news for Netflix. Sarandos told Bloomberg that the company had a "very tight range" that it was willing to pay for Warner Bros. and that "I'm happy where we got in and happy where we got out."

Asked if there was a "world in which you guys go after another studio in the next 6 to 12 months?" Sarandos said, "Unlikely. We are builders, not buyers. All that is still true."

There's an old saying in business: "Some of the best deals are the ones you don't make." By knowing when to walk away, Netflix might be better off -- without overpaying or taking on too much debt for uncertain future gains.

The streaming wars might not be over

Instead of getting bogged down in a lengthy, expensive acquisition, Netflix can now focus on its core strengths as a company: creating and licensing must-see content. The company expects to spend about $20 billion on content in 2026. The $2.8 billion breakup fee will cover part of that.

Netflix has a few big risks on the horizon. Although many people think of the company as the undisputed winner of the streaming wars, the truth is more complicated. According to Nielsen, as of January 2026, Netflix ranked as the No. 3 media company for total TV usage, with 8.8% of viewing. YouTube (owned by Alphabet) and Disney ranked No. 1 and No. 2.

Netflix shareholders are likely happy to see that the company avoided a deal that could've turned out to be an expensive mistake. But now the company needs to find another big hit like Stranger Things. The streaming market is competitive and costly. I wouldn't rate Netflix stock as a strong buy.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.