In a seismic shift for the entertainment industry, Netflix announced Friday it has entered a definitive agreement to acquire Warner Bros. Discovery’s studios and streaming assets for approximately $82.7 billion, marking the largest media merger of the decade and potentially reshaping how audiences consume films and TV worldwide.
The cash-and-stock transaction, valued at $27.75 per Warner Bros. Discovery (WBD) share, implies an equity value of $72 billion and includes assumption of more than $10 billion in debt. It eclipses Disney’s $71 billion purchase of 21st Century Fox in 2019 as the biggest Hollywood consolidation to date. The deal, unanimously approved by both companies’ boards, is expected to close in the third quarter of 2026, following WBD’s planned spin-off of its cable networks—such as CNN, TNT, and Discovery Channel—into a separate publicly traded entity called Discovery Global.
Under the terms, each WBD shareholder will receive $23.25 in cash and $4.50 in Netflix stock per share. Netflix has pledged a hefty $5.8 billion termination fee if regulators block the merger, while WBD would pay Netflix $2.8 billion if it backs out.
A Content Powerhouse Emerges
The acquisition catapults Netflix, already the world’s largest streaming service with over 280 million global subscribers, into control of an unparalleled library of intellectual property. Warner Bros., a century-old icon, brings timeless classics like Casablanca and Citizen Kane, alongside modern juggernauts including the Harry Potter franchise, DC Comics adaptations such as Batman and Superman, and HBO’s prestige series like The Sopranos, Game of Thrones, Succession, and The White Lotus. HBO Max, WBD’s streaming platform, will integrate with Netflix, with select Warner and HBO content periodically added to the service—though Netflix has committed to maintaining HBO Max as a complementary offering.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” said Netflix co-CEO Ted Sarandos in a statement. He highlighted synergies with Netflix originals like Stranger Things, Squid Game, and K-Pop Demon Hunters, promising continued investment in “stories that matter most to audiences.” Netflix also pledged to preserve Warner Bros.’ operations, including theatrical releases for major films, addressing early industry fears of a full pivot to streaming-only distribution.
David Zaslav, WBD’s president and CEO, echoed the optimism: “Today’s announcement combines two of the greatest storytelling companies in the world.” The merger is projected to yield $2-3 billion in annual cost savings by year three and be accretive to Netflix’s earnings per share by year two.
Bidding War Culminates in Netflix Victory
The deal caps a frenzied auction that began in October when WBD, reeling from debt and cord-cutting pressures, put its studio and streaming businesses up for sale. It shelved earlier plans to split into two entities: one for streaming/studios and another for linear TV. Initial suitors included Paramount Global—recently snapped up by Oracle co-founder Larry Ellison’s family for billions—and Comcast, owner of NBCUniversal. Netflix entered late but emerged victorious after exclusive talks over the U.S. Thanksgiving holiday, outbidding rivals with its premium offer and regulatory assurances.
Bloomberg reported Netflix secured a multibillion-dollar bridge loan to fund the purchase, underscoring its aggressive push into traditional Hollywood amid slowing subscriber growth.
Antitrust Storm Clouds and Industry Backlash
Despite the fanfare, the merger faces intense scrutiny from regulators and stakeholders. Netflix shares dipped in New York trading Thursday amid speculation, and analysts like Kathleen Brooks of XTB warned of “a Netflix monopoly” in TV and movies, potentially complicating management of the “mega company.”
In the U.S., bipartisan lawmakers sounded alarms. Democratic Sen. Elizabeth Warren branded it an “anti-monopoly nightmare,” arguing it would command nearly half the streaming market, hike prices, curb choices, and endanger jobs—while decrying the Trump administration’s antitrust process as a “cesspool of political favoritism.” Republicans, including Sen. Mike Lee (R-Utah) and Rep. Darrell Issa (R-Calif.), urged the Justice Department and FCC to probe reduced consumer options and fewer theatrical releases. The combined entity could exceed 30% market share in streaming, a red flag under antitrust law.
Hollywood guilds piled on. The Writers Guild of America (WGA) East and West called for the deal to be blocked, warning it would “eliminate jobs, push down wages, [and] worsen conditions for all entertainment workers.” The Directors Guild of America plans urgent talks with Netflix over “significant concerns.” Cinema United, representing 50,000+ screens, decried an “unprecedented threat to the global exhibition business.” Even Titanic director James Cameron labeled a Netflix takeover “a disaster” pre-announcement, citing risks to cinema.
In Europe, EU antitrust experts anticipate review but doubt a outright block, predicting “access remedies” like content-sharing mandates instead. Paramount, stinging from defeat, has hinted at a rival shareholder bid and antitrust challenges, enlisting ex-Trump official Makan Delrahim to argue the deal violates competition laws.
Sarandos dismissed hurdles: “We’re really confident that we’re going to get all the necessary approvals.” Legal experts note outcomes hinge on market definitions—narrow (streaming-only) vs. broad (all video eyeballs, including YouTube)—with remedies like asset divestitures possible.
Broader Implications for Hollywood and Beyond
If approved, the union could force further consolidations among rivals like Disney and Amazon, amplifying tech’s grip on Tinseltown. Critics fear throttled theatrical windows, job losses, and homogenized content, while proponents tout innovation and global reach. On X, reactions ranged from excitement over Justice League reboots to frets on subscription hikes and anime impacts.
Advisors include Allen & Company, J.P. Morgan, and Evercore for WBD; the deal now awaits shareholder votes and regulatory green lights. As Netflix aims to “dominate Hollywood,” the coming months will test whether this blockbuster bet elevates storytelling—or strangles competition. Updates as the saga unfolds.
