The Paramount/Warner Bros. Deal (Part 3 of 4): Heads, Netflix Wins. Tails, Netflix Doesn't Lose.

How did Netflix manage to engineer a bidding war in which, whether or not the company "won," it could still declare victory?

I’m going to admit, perhaps too publicly, to an opinion that I suspect may be fairly common among the people reading this: I don’t really like Netflix.¹

I still subscribe, of course: they’ve come as close to “utility” status as any platform in the streaming era, and daddy needs his Great British Baking Show and Drive to Survive. I count many current and former Netflix executives as close and valued friends. And over the course of my career, I’ve done a lot of very satisfying business there, and worked on some very cool projects that I am incredibly proud of (which Netflix also supported admirably).

But I hate that Netflix, more than any other company, is responsible for setting off a years-long industry-wide arms race of obviously unsustainable spending, knowing it was better positioned than any of its competitors to endure the madness. I find its corporate culture to be generally horrifying. I resent its normalization of releasing series seasons years apart, making it nearly impossible for me to stay invested in any of its fancy premium dramas past their first seasons. I am perpetually annoyed that its dominance was achieved, in no small part, by somehow convincing the American investor class that it is a “technology company” instead of a “entertainment/media company” (thereby unlocking huge advantages in access to capital, more favorable loan terms, and greater investor tolerance for long-deferred profitability and ridiculous P/E ratios).² For all those reasons and more, I view Netflix as having been a mostly pernicious force upon the broader industry. And maybe worst of all, I suspect that Netflix likes it that way — because I think that, while every studio in town has always worked hard to stand tallest among its rivals, Netflix is the first and only to seemingly aspire to be the last and only rival standing.³

The reason I share all of that is so that you will understand how much it pains me when I say this next part: I think that Netflix pulled off an incredible strategic coup here, whose most impressive aspect is that I would be saying the same thing no matter how its pursuit of Warner Bros. had actually worked out.

For The Business of Television Max(+)’s debut week, I’ll be taking on the story that most of us are already talking about anyhow: Paramount’s victory in the most protracted and exasperating will-they-or-won’t-they corporate courtship since Skydance bought Paramount just a few years ago. And to celebrate this launch, I’m making it a four-part series (after which I hope to never talk about this subject, or write another four-part series about any subject, ever again):

• In Monday’s Part 1, I gave a short answer to the question “Is this a good deal for Paramount?” (and a much longer answer to the question “Does it even matter?”).

• In yesterday’s Part 2, I looked at this deal in the context of Hollywood’s abysmal track record with mega-mergers, and considered what it will take for Ellison to succeed where so many others have failed.

• In today’s Part 3, I explain why this outcome is a still a win for Netflix — and how they managed to rig the situation so that pretty much any other outcome would have been too.

• And finally, in tomorrow’s Part 4, I’ll wrap up by exploring what this deal means for everyone else who didn’t have a seat at the bargaining table (and for one person who did).

Win Scenario #1: Lose the Bidding War

I’m generally skeptical of bidding wars. The heat of competition, especially in a process as public as this one, can make usually disciplined and hard-nosed decision-makers temporarily take leave of their senses, carried away by the irrepressible drive to just win, baby. Paramount’s first bid for Warner Bros. Discovery, in September 2025, was worth less than half the eventual purchase price, and was offered as a mix of cash and stock. Even assuming that was intended as nothing more than a low-ball conversation starter, if Paramount started this process with any target “final closing price” in mind, I doubt it included an extra digit on their offer (now all cash).

When a bidding war starts to really heat up, I’ll usually find at least one opportune moment to remind colleagues or clients: “Sometimes, the best deal is the one you didn’t make.” With the purchase price for Warner Bros. Discovery having been driven so high as to defy all conventional business logic, this looks like a perfect illustration of that principle in action for Netflix. Consider the various benefits that Netflix will enjoy despite (or because of) “losing” this bidding war (on top of “not spending $111 billion”):