Dec. 5 — Netflix has agreed to acquire Warner Bros. Discovery’s film and television studios along with its streaming division for a staggering $72 billion. This acquisition marks a significant shift, placing one of Hollywood’s most prized establishments into the hands of the company that revolutionized the media landscape.
The announcement came on Friday, following a competitive bidding process that saw Netflix emerging as the frontrunner with an offer close to $28 per share, surpassing Paramount Skydance’s offer of nearly $24 for the entirety of Warner Bros. Discovery, including the cable assets set to be separated.
On Thursday, Warner Bros. Discovery’s stock closed at $24.50, representing a market capitalization of $61 billion.
Deal aims to reshape the media landscape
Acquiring the rights to hugely popular franchises like “Game of Thrones,” “DC Comics,” and “Harry Potter” enhances Netflix’s standing in Hollywood. This move is crucial for the streaming giant, which has carved out a place in the industry without relying heavily on major acquisitions or vast content libraries. It also helps Netflix fend off competition from the likes of Walt Disney Co. and Paramount, the latter being backed by the Ellison family.
“Together, we can offer our viewers more of what they cherish and help shape storytelling for the next century,” said Netflix co-CEO Ted Sarandos in a statement.
Potential for antitrust challenges
Experts suggest Netflix’s motivation stems from a need to secure long-term access to popular shows and films while reducing its reliance on external studios, particularly as it aims to branch into gaming and explore other growth opportunities after its recent success in addressing password sharing issues.
However, this deal is likely to attract heightened antitrust scrutiny in both Europe and the U.S., as it positions Netflix to control a competitor in HBO Max, the largest streaming service globally, which has nearly 130 million subscribers.
In a letter earlier this week, Paramount, which initiated the bidding war through unsolicited offers and maintains strong connections to the Trump administration, raised concerns about potential bias in the sale process favoring Netflix.
To address worries about market power concentration, Netflix reportedly argued during negotiations that merging its platform with HBO Max would lower bundled service costs, ultimately benefiting consumers.
The company also reassured Warner Bros. Discovery that it would continue to distribute the studio’s films in theaters, easing fears that the deal might diminish another major source of theatrical films.
Stock market response
Following the news, Netflix’s stock dropped nearly 3% in premarket trading, while Paramount’s experienced a 2.2% decline. Comcast, a potential third bidder, remained relatively unchanged.
According to the terms of the deal, shareholders of Warner Bros. Discovery will receive $23.25 in cash and about $4.50 in Netflix stock for each share, valuing Warner at approximately $27.75 per share and totaling around $72 billion in equity, or $82.7 billion when including debt.
The transaction is anticipated to finalize after Warner Bros. Discovery separates its global networks division, Discovery Global, into a standalone publicly traded entity, a process expected to be completed by the third quarter of 2026.
