Streaming giant makes bold move into Hollywood’s studio elite
Netflix has agreed to buy Warner Bros Discovery for $72 billion, gaining control of some of Hollywood’s most iconic film and TV franchises. The deal marks a milestone in entertainment history as the streaming disruptor becomes a mainstream studio owner. Netflix co-CEO Ted Sarandos told investors the acquisition is a rare opportunity to strengthen its mission of global entertainment leadership.
The agreement follows an intense bidding race, beating out Paramount Skydance and Comcast. The offer, valued at nearly $28 per share, would hand Netflix access to Warner Bros’ century-old content library, including Game of Thrones, Harry Potter, and the DC superhero universe. Shares of Warner Bros Discovery gained 3.2% after the announcement.
Competition and regulatory concerns ahead
The deal faces strong regulatory scrutiny in both the United States and Europe. Netflix, with almost 130 million streaming subscribers at HBO Max alone now under its umbrella, would become an even more dominant industry force. Critics warn the takeover could weaken competition, reduce theatrical output, and hurt creative diversity.
Trade groups and former industry executives have voiced concern. Cinema United called it an “unprecedented threat” to movie theaters. Former WarnerMedia CEO Jason Kilar argued that the deal could significantly reduce competitive pressure in Hollywood. Some lawmakers have already questioned whether the merger serves consumer interests.
Netflix has pledged to keep releasing Warner films in cinemas and expand production and job opportunities to help ease those fears. Co-CEO Greg Peters said the combined companies could offer bundled services to lower streaming costs for subscribers.
Deal structure and financial goals
The transaction is a cash-and-stock arrangement valuing Warner Bros Discovery at $72 billion in equity, or $82.7 billion including debt. Warner shareholders will receive $23.25 in cash and about $4.50 in Netflix stock per share. The deal includes a $5.8 billion breakup fee if Netflix walks away.
Completion is expected after Warner spins off its Discovery Global network unit into a separate company in the third quarter of 2026. Netflix projects annual cost synergies of $2 billion to $3 billion by year three post-closing.
Strategic shift as growth slows
Netflix is strengthening control over key franchises while expanding into gaming and an ad-supported streaming tier. Growth has moderated this year, with shares up only 16% following an 80% rally in 2024. The company has stopped reporting subscriber totals, increasing investor focus on its long-term strategy.
Warner’s game division, including the billion-dollar success Hogwarts Legacy, may accelerate Netflix’s expansion in interactive entertainment. Sarandos noted the two companies together can help “define the next century of storytelling.”
