Netflix has agreed to buy Warner Bros Discovery’s TV and film studios and streaming division for $72 billion, a deal that would hand control of one of Hollywood’s most prized and oldest assets to the streaming pioneer that has upended the media industry.
The agreement – announced on Friday – follows a weeks-long bidding war where Netflix seized the lead with a nearly $28-a-share offer that eclipsed Paramount Skydance’s nearly $24 bid for the whole of Warner Bros Discovery, including the cable TV assets slated for a spinoff.
Warner Bros Discovery shares closed at $24.5 on Thursday, giving it a market value of $61 billion.
DEAL SET TO RESHAPE MEDIA LANDSCAPE
Buying the owner of marquee franchises including Game of Thrones, DC Comics and Harry Potter will further tilt the power balance in Hollywood in favor of the streaming giant that built its dominance without major acquisitions or a large content library, helping its efforts to ward off competition from Walt Disney and the Ellison family-backed Paramount.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” Netflix co-CEO Ted Sarandos said in a statement.
STRONG ANTITRUST SCRUTINY LIKELY
Analysts have said Netflix is driven by a desire to lock up long-term rights to hit shows and films and rely less on outside studios as it expands into gaming and looks for new avenues of growth after the success of its password-sharing crackdown.
But the deal will likely face strong antitrust scrutiny in Europe and the U.S. as it would give the world’s biggest streaming service ownership of a rival that is home to HBO Max and boasts nearly 130 million streaming subscribers.
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David Ellison-led Paramount, which kicked off the bidding war with a series of unsolicited offers and has close ties with the Trump administration, questioned the sale process earlier this week in a letter alleging favorable treatment to Netflix.
To ease concerns about market concentration, Netflix argued in deal talks that a potential combination of its streaming service with HBO Max would benefit consumers by lowering the cost of a bundled offering, Reuters reported on Tuesday.
The company has also told Warner Bros Discovery that it would keep releasing the studio’s films in cinemas in a bid to ease fears that its deal would eliminate another studio and major source of theatrical films, according to media reports.
CASH-AND-STOCK DEAL
Netflix shares were down nearly 3% in premarket trading, while Paramount was down 2.2%. Comcast, the third suitor, was trading little changed.
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Under the deal, each Warner Bros Discovery shareholder will receive $23.25 in cash and about $4.50 in Netflix stock per share, valuing Warner at $27.75 a share, or about $72 billion in equity and $82.7 billion, including debt.
The deal is expected to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, into a separate listed company, a move now set for completion in the third quarter of 2026.
Netflix said it expects to generate at least $2 billion to $3 billion in annual cost savings by the third year, after the deal closes.
