Netflix stunned Hollywood on Friday by agreeing to acquire Warner Bros Discovery’s TV, film and streaming division for a massive $72 billion, marking one of the most dramatic shifts in entertainment history. The deal hands Netflix control of one of Hollywood’s oldest and most cherished studios, turning the on-demand disruptor into a full-fledged traditional powerhouse.
“We know many of you are surprised — and I get it,” said Netflix Co-CEO Ted Sarandos during a call with investors. “We’ve always been builders rather than buyers, but this is a rare opportunity that strengthens our mission to entertain the world.”
The agreement ended a tense bidding war in which Netflix outpaced front-runner Paramount Skydance, offering nearly $28 per share — a significant premium. With this acquisition, Netflix gains access to Warner Bros’ century-deep vault of brands, including Harry Potter, Game of Thrones, and the DC Universe featuring Batman and Superman.
Sarandos said the pairing of Netflix’s global reach with Warner Bros’ legacy would “help define the next century of storytelling,” echoing his long-standing ambition to “become HBO faster than HBO can become us.”
Shares of Warner Bros Discovery rose 3.2% following the announcement, while Netflix dipped slightly and Paramount slid over 6%.
The deal faces a tough road with regulators in both the United States and Europe, given that Netflix — the world’s largest streamer — is now buying the parent of HBO Max, which has nearly 130 million subscribers. Analysts warn of major pushback from Hollywood unions, lawmakers, and theatrical groups.
Cinema United, representing global movie theaters, warned the merger is an “unprecedented threat” to cinemas. Even former WarnerMedia CEO Jason Kilar said he couldn’t think of a “more effective way to reduce competition” than selling to Netflix.
Netflix countered these concerns, saying the merger will bring consumers more variety, increase production and job creation, and preserve theatrical releases of Warner Bros films.
Co-CEO Greg Peters added that Netflix could bundle HBO Max into its platform or expose HBO’s titles to its vast audience — much like how Breaking Bad and Suits found second lives on Netflix.
Under the cash-and-stock deal, Warner Bros Discovery shareholders will receive $23.25 in cash and about $4.50 in Netflix stock per share. The acquisition values Warner at $27.75 per share — a 121% premium to its price before buyout talks surfaced.
The deal is expected to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, in the third quarter of 2026. Netflix has included a hefty $5.8 billion breakup fee, while Warner Bros Discovery would pay $2.8 billion if it pulls out.
Netflix expects to save $2–3 billion annually by year three, though analysts say the driving force behind this acquisition is its need for long-term rights to premium franchises — and new paths for growth as streaming matures.
Warner’s gaming division, behind hits like Hogwarts Legacy (which topped $1 billion in revenue), also gives Netflix a boost in its evolving gaming ambitions, which have struggled recently.
Despite Netflix’s blockbuster 2024, its stock is up just 16% this year as concerns grow about slowing subscriber momentum and a rocky push into gaming and advertising.
But if this deal clears regulators, the company that once disrupted Hollywood may become the studio shaping its future.
