Paramount Paid Netflix $2.8 Billion Breakup Fee for Warner Bros.

Netflix just got a little richer as a result of letting Warner Bros. Discovery go.

On Friday, Netflix announced that Paramount Skydance has now paid the streamer its promised $2.8 billion breakup fee following Paramount’s victory — pending an official vote and subsequent regulatory approval — in their bidding war for WBD.

Per an SEC filing, Netflix said Warner Bros. Discovery “provided notice to Netflix that it had terminated the Merger Agreement in accordance with its terms in order to enter into an Agreement and Plan of Merger with PSKY in respect of such Company Superior Proposal.”

Upon the termination, Netflix said Paramount Skydance paid the $2.8 billion fee Netflix was owed in accordance with the merger agreement it had signed with Warner Bros. Discovery.

Netflix on Thursday afternoon formally declined to increase its $83 billion offer to buy Warner Bros. and HBO Max Discovery, after WBD’s board declared Paramount Skydance’s latest bid ($111 billion for the entirety of WBD, including its linear channels) a “superior proposal” to the agreement it already had in hand with Netflix.

The now-dead Netflix deal, which included buying Warner Bros. and HBO Max, was valued at nearly $83 billion. Paramount’s latest bid, submitted Feb. 24, was an approximately $111 billion bid for the entirety of WBD, including its linear cable channels.

The swift decision by Netflix shocked Hollywood, as the streamer had four business days, or until Wednesday, March 4 at 11:59 p.m. ET, to come up with a new proposal to salvage its WBD deal.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement issued Thursday, less than two hours after Warner Bros. Discovery revealed its board’s new decision. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”

The Netflix chiefs said “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”