Episode 139: Paramount & Netflix Cut Their Animation Pact

Paramount and Netflix are ending their animated film pact — a deal originally struck in 2023 between Netflix and Skydance Animation before the Skydance-Paramount merger. The unwind is orderly: two films already in production (Brad Bird's Ray Gunn and Rich Moore's untitled Jack and the Beanstalk project) remain committed to Netflix, while the broader content licensing relationship between the two companies continues. For agents, producers, and executives with projects at Skydance Animation, the distribution economics just changed — and the question of where the pipeline flows next is live. Key Takeaways: Paramount and Netflix have mutually agreed to end their animated film agreement, originally announced in 2023 between Netflix and Skydance Animation. Skydance's Swapped — the final major release under the pact — hit 144.9M global views, making it one of Netflix's most-watched movies of all time. Two pipeline films remain committed to Netflix: Brad Bird's Ray Gunn (awards-season positioned) and Rich Moore's untitled Jack and the Beanstalk project. Skydance Animation's next theatrical bet, Cosmic Motors, will release under Paramount's banner — directed by John Lasseter and co-directed by Louie Del Carmen. Netflix Animation's in-house capability has scaled dramatically: KPop Demon Hunters hit 325.1M global views and opened to $19M at the box office in late August 2025 — Netflix's first film to hit #1 at the weekend box office. Steps — arriving this November — is Netflix Animation Studios' first film made entirely in-house, signaling the division no longer needs external output deals to fill its slate. Paramount's content licensing to Netflix (Matlock, NCIS, SEAL Team, Watson, The King of Queens) is unaffected and continues under a separate longstanding agreement. This deal ending is a structural signal, not a product failure. Netflix Animation has built genuine in-house production capability and no longer needs Skydance's output to compete. Meanwhile, Paramount — now a fully integrated Skydance entity — has its own theatrical and streaming distribution to feed. The split is logical for both sides. For talent and their representatives with projects at Skydance Animation, the immediate priority is clarifying pipeline positioning: theatrical Paramount deals, Paramount+ deals, and Netflix output deals carry materially different economics on backend and international. That conversation is worth having now, before the new distribution lanes harden. Subscribe to The Option for daily updates on the business behind the business.