HOLLYWOOD, United States — The media industry is facing a massive shake-up after Netflix agreed to purchase the film and television studios and streaming assets of Warner Bros Discovery (WBD) for approximately $72 billion.
The deal, announced on Friday, hands the streaming giant control of one of Hollywood’s oldest and most valuable content libraries and production houses.
The agreement follows a competitive, weeks-long bidding war where Netflix’s offer of nearly $28 per share eclipsed a roughly $24 per share bid from Paramount Skydance for the entire WBD entity. WBD shares had closed at $24.50 on Thursday, giving the company a market value of $61 billion.
By acquiring the home of marquee franchises like Game of Thrones, DC Comics, and Harry Potter, Netflix solidifies its position against major competitors like Walt Disney and the Ellison family-backed Paramount. The streaming pioneer, which built its dominance without major library acquisitions, is now set to lock up long-term rights to blockbusters and hit series.
Netflix Co-CEO Ted Sarandos hailed the combined potential of the two entities:
“Together, we can give audiences more of what they love and help define the next century of storytelling,” Sarandos said in a statement.
Antitrust scrutiny expected
The combination, however, is anticipated to face strong antitrust scrutiny in both the United States and Europe.
The deal would grant the world’s largest streaming service ownership of a major rival that operates HBO Max and boasts nearly 130 million streaming subscribers.
David Ellison-led Paramount, which initiated the bidding war, previously questioned the sale process this week, alleging that Netflix received favorable treatment.
To preempt concerns regarding market concentration, Reuters reported on Tuesday that Netflix argued in deal talks that bundling its service with HBO Max would ultimately benefit consumers through lower costs.
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Furthermore, media reports suggest Netflix reassured WBD that it plans to continue releasing the studio’s films in cinemas, aiming to ease fears that the deal would eliminate another major source of theatrical releases.
Financial terms and timeline
The transaction is structured as a cash-and-stock deal, valuing WBD at $27.75 per share, or approximately $72 billion in equity (and $82.7 billion including debt). Under the terms:
- Each WBD shareholder will receive $23.25 in cash and approximately $4.50 in Netflix stock per share.
Following the announcement, Netflix shares were down nearly 3% in premarket trading, while Paramount dropped 2.2%.
The deal is expected to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, into a separate listed company. This mandatory spin-off is currently slated for completion in the third quarter of 2026.
Netflix anticipates the merger will generate at least $2 billion to $3 billion in annual cost savings by the third year following the closure.
