Why Netflix Prematurely Ended Major Paramount Deal After 14.7B Fantasy Hit

Published Nov 5, 2026, 12:34 PM EST

Grant Hermanns is a TV News Editor, Interview Host and Reviewer for ScreenRant, having joined the team in early 2021. He got his start in the industry with Moviepilot, followed by working at ComingSoon.net. When not indulging in his love of film/TV, Grant is making his way through his gaming backlog and exploring the world of Dungeons & Dragons with friends.

Netflix and Paramount's partnership through Skydance Animation proved fruitful, but also ended for one key reason.

The animation house memorably shifted from having a first-look deal set at Apple TV to the aforementioned streaming behemoth in late 2023, which would subsequently take over the releases of the then-in-production Swapped, Spellbound and Ray Gunn, among others. The Juno Temple and Michael B. Jordan-led fantasy film immediately became a massive sensation for Netflix, securing a spot on its all-time Top 10 Movies list.

However, in the wake of Skydance and Paramount's merger, Netflix ended their deal with Skydance Animation, and a new report from TheWrap has offered some clarification as to why. Their sources report that it stemmed from Netflix finally having their own animation studio after previously partnering with others for their titles, namely Sony Pictures Animation and Skydance. As such, the report states that Netflix elected to end its deal with the latter and maintain its partnership with the former to avoid overcrowding of animation productions.

Considering the swift turnaround between the first-look deal's signing and its abrupt ending, Netflix breaking away from Skydance Animation certainly took the industry by storm. Even beyond the record-breaking success of Swapped and the impending release of Ray Gunn from Incredibles alum Brad Bird, this continued the Paramount-owned studio's struggle to establish a home for themselves with any particular streaming service.

However, it is important to note that Ray Gunn will not be the last Skydance Animation title released by Netflix through their prior deal, nor does it mean they'll never work with the studio again. The streamer is still going to release the new Jack and the Beanstalk adaptation from Zootopia's Rich Moore, which does not yet have a release date, before the other in-production title, Cosmic Motors from Pixar vet John Lasseter, is sold elsewhere for a potential theatrical release.

Based on the reasons listed in the new report, it does ultimately make sense that Netflix elected to end their deal with Skydance and Paramount a little prematurely. Their partnership with Sony began with an Oscar nomination in the sci-fi road trip comedy The Mitchells vs. The Machines, before building to their global sensation of KPop Demon Hunters. The latter film, which has a sequel in development for a tentative 2029 release window, not only won both of its Oscar nods, but is also the streamer's biggest movie of all time with upwards of 32.5 billion minutes viewed.

Rearrange the movies into the correct US release order.

Moreover, in limiting their external partnerships, Netflix now has a better means of breaking into the animation industry without sharing rights or licensing fees. The streamer is on the verge of fully breaking into the theatrical forum, beginning with the IMAX-exclusive release of Brad Pitt's The Further Mis-Adventures of Cliff Booth before escalating further with Greta Gerwig's Narnia: The Magician's Nephew, and could find their revenues growing even higher if their self-produced animated titles become box office sensations.

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Swapped is an adventure film released in 2026, following a small forest animal and a proud bird who experience a sudden body swap. Together, they navigate unfamiliar lives and embark on a chaotic journey through the wild, transforming their unlikely partnership into a fast-moving adventure.