Netflix (NFLX.O) agreed on Friday to acquire Warner Bros Discovery’s (WBD.O) television and film studios, along with its streaming division, in a $72 billion deal. The acquisition would give the streaming giant control over one of Hollywood’s oldest and most valuable entertainment assets.
The agreement ends a weeks-long bidding battle in which Netflix nearly reached a $28-per-share offer, topping Paramount Skydance’s (PSKY.O) bid of about $24 per share for the entire Warner Bros Discovery portfolio, including cable TV properties planned for spinoff. Taking ownership of major franchises such as “Game of Thrones,” “DC Comics,” and “Harry Potter” will further shift Hollywood’s power structure toward Netflix, which built its dominance with minimal acquisitions and without a massive legacy library.
Netflix co-CEO Ted Sarandos said the combined companies will “help define the next century of storytelling,” recalling his earlier statement that “the goal is to become HBO faster than HBO can become us.”
Warner Bros Discovery shares rose 4.4% to $25.6 in premarket trading, while Netflix fell about 3% and Paramount dropped 2.2%. Paramount and Comcast, another interested bidder, did not immediately comment.
CNBC reported that Paramount later offered $30 per share, though Reuters has not confirmed when that bid was made.
Antitrust Scrutiny Expected
The merger is expected to face intense antitrust review in both the United States and Europe, as it would give the world’s biggest streaming platform control over a major rival with nearly 130 million subscribers through HBO Max. Paramount, led by David Ellison and backed by figures close to the Trump administration, previously raised concerns about the fairness of the sale process, arguing Netflix received preferential treatment.
Lawmakers and industry groups have also voiced alarm. Cinema United called the merger an “unprecedented threat” to global movie theaters, while former WarnerMedia CEO Jason Kilar said he could not imagine “a more effective way to reduce competition in Hollywood.”
To address concerns, Netflix argued the deal will bring more content to customers, expand its U.S. production footprint, increase long-term investment in original programming, and create new opportunities for creative workers. Netflix also stated that combining its streaming service with HBO Max could lower consumer costs through bundling.
Reports say Netflix assured Warner Bros Discovery that it would continue releasing films theatrically, attempting to ease fears that the acquisition would eliminate a major studio from cinemas.
Analyst Paolo Pescatore noted that regulators will heavily scrutinize the merger, warning the approval process may be prolonged.
Cash-and-Stock Deal Details
Under the agreement, Warner Bros Discovery shareholders will receive $23.25 in cash and about $4.50 in Netflix stock per share, valuing the company at $27.75 per share—a premium of 121% compared with its closing price on September 10, before buyout rumors emerged.
The deal is expected to close after Warner Bros Discovery completes the spinoff of its global networks division, Discovery Global, planned for Q3 2026. Netflix has agreed to a $5.8 billion breakup fee, while Warner Bros Discovery would owe Netflix $2.8 billion if the deal fails.
Netflix expects $2–3 billion in annual cost savings within three years of closing.
Netflix’s Growth Concerns and Strategy Shift
Analysts believe Netflix’s motivation includes securing long-term rights to major franchises and reducing reliance on external studios. The company is also expanding into gaming as it searches for new growth opportunities following its successful password-sharing crackdown.
Netflix shares are up 16% this year, below the 80% surge seen in 2024, as investors worry its rapid expansion may be slowing—especially after the company stopped reporting subscriber numbers. Its ad-supported tier has grown but isn’t expected to become a major revenue source until next year. Meanwhile, its gaming ambitions have faced setbacks due to strategic pivots and executive exits.
Owning Warner Bros could strengthen Netflix’s gaming business, as WBD has produced hits such as “Hogwarts Legacy,” which has earned over $1 billion.