In a stunning twist, Netflix is declining to raise its bid for Warner Bros., positioning David Ellison’s Paramount as the winner in the battle for the fabled studio.

Netflix co-CEOs Ted Sarandos and Greg Peters released a statement Thursday outlining their decision, namely that the deal is “no longer financially attractive” and that it “was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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 co-CEOs said.

“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process,” they added. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S.  But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

With Netflix out, Paramount’s latest bid is almost a sure thing to be accepted by the Warners board, which determined earlier Thursday that it was a “superior proposal” to Netflix’s deal.

“Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us. We wish them well in the future,” said David Zaslav, president and CEO of Warner Bros. Discovery. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”

PSKY’s latest proposal was for $31 per share, but had a number of other sweeteners, including a ticking fee payable to shareholders equal to $0.25 per quarter beginning after Sept. 30, 2026, as well as a $7 billion regulatory termination in the event the transaction does not close due to regulatory matters.

Paramount has also agreed to pay the $2.8 billion termination fee that Warner Bros. would be required to pay to Netflix to terminate the existing merger agreement.

If all goes as expected, Netflix will be on the receiving end of that $2.8 billion sooner rather than later. Netflix shares soared by more than 10 percent in after-hours trading after the decision was announced.

“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” Paramount CEO David Ellison said in a statement on Thursday before Netflix backed out of the bidding.

Sarandos and Peters say they will continue to pour cash into content.

“Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program,” the co-CEOs said. “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”