Paramount Skydance Corporation (PSKY) got outmaneuvered in what turned out to be a contentious battle for Warner Bros. Discovery (WBD), and investors aren't happy about it. Shares dropped more than 7% as news broke that streaming giant Netflix (NFLX) walked away with the prize.

The Deal That Got Away

Here's where things get interesting. Paramount actually offered more per share—$30 in all cash, according to CNBC. Netflix's winning bid came in at $27.75 per share as part of an $82.7 billion package combining stock and cash. So why did Warner Bros. choose the lower number?

Paramount's legal team certainly has thoughts about that. They've accused Warner Bros. of failing to properly evaluate their offer and suggested the Netflix deal was essentially a done deal from the start. That's the kind of claim that could make things messy down the road.

What This Means for Streaming

A Netflix-HBO combination creates some fascinating dynamics. If Netflix bundles HBO (Warner Bros.' streaming service) with its existing platform, consumers might see cost savings. But that could squeeze Netflix's revenue margins in the process.

Then there's the subscriber math. Some analysts argue Netflix won't actually gain much from this merger because there's significant overlap between Netflix and HBO Max users. Plus, if the combined service gets offered at a discount, the financial benefits become even murkier.

The Scope Question

Another wrinkle: Paramount bid for everything Warner Bros. owns—the film studio, streaming operations, and TV networks including CNN and TNT Sports. Netflix and Comcast (CMCSA) only wanted the studio and HBO Max, leaving the TV networks as an afterthought.

Price Action: Paramount Skydance shares traded down 7.76% at $13.67 at the time of publication, according to market data.