Netflix, Paramount, and the battle for Warner Bros. Discovery
In December 2025, Netflix (NFLX) agreed to acquire the studio and streaming divisions of Warner Bros. Discovery (WBD) in a cash-and-stock transaction valued at about $72 billion, or roughly $82.7 billion including the assumption of Warner’s debt. Here’s a look at the deal and its potential impact.
Studio riches
The proposed deal would bring Warner’s extensive film and television catalog—including HBO and HBO Max, as well as the Warner Bros. studio infrastructure—under Netflix’s control. If approved, the acquisition would mark Netflix’s first major move into studio ownership and significantly expand its role in film and television production. The Warner Bros. studio in Burbank, California, sits on more than 110 acres and contains 31 soundstages and 11 exterior sets. Warner also owns a separate 200-acre facility just outside London.
Netflix swoops in
In October 2025, Warner said it had begun reviewing offers from several potential buyers while continuing to pursue its plan to divide the company into two separate businesses. The disclosure came after Paramount Skydance (PSKY) had made three unsolicited bids to acquire Warner in the preceding weeks.
In November 2025, Warner confirmed that Netflix, Comcast (CMCSA), and Paramount had each submitted formal proposals to acquire some or all of its assets. The following month, Warner’s board agreed to enter exclusive negotiations with Netflix on a roughly $82.7 billion cash-and-stock offer that includes the assumption of Warner’s debt. The proposal would transfer the company’s studio and streaming operations—but not its cable networks—to Netflix, with an expected closing in the third quarter of 2026.
Ahead of any deal, Warner plans to spin off its cable networks—including CNN, Discovery, HGTV, and TNT Sports—into a separate company.
The (movie) plot thickens
Paramount intensified its challenge to the proposed Netflix–Warner deal by submitting a hostile all-cash bid for the entire company. After reviewing the proposal, Warner’s board rejected the offer, calling it “illusory” and raising concerns about the credibility of the equity Paramount was offering and the structure of the Ellison family’s financial backing. The board said Paramount had “consistently misled” Warner shareholders and reaffirmed that the Netflix agreement remained superior in both financial value and certainty of execution.
Paramount said its offer was not its “best and final” proposal, indicating it might raise its bid as its tender offer continued toward its January 8, 2026, expiration. Regulators in multiple jurisdictions are expected to review the Netflix merger, and a shareholder vote on the transaction is not anticipated until spring or summer 2026.
Next steps and industry questions
The proposed Netflix acquisition still requires regulatory approval in multiple jurisdictions, and a shareholder vote isn’t anticipated until spring or summer 2026. Regulators are expected to examine how the merger could affect competition in film and television distribution, including the combination of Netflix’s streaming service with Warner’s studio operations and HBO, HBO Max, and related streaming services.
Questions also remain about how Netflix would integrate Warner’s production facilities and ongoing projects if the deal is completed. Paramount has said its hostile bid wasn’t its “best and final” proposal, indicating it may continue to challenge the Netflix agreement as the review process moves forward.
The deal raises broader questions for the entertainment industry:
- How might further consolidation affect the remaining major Hollywood studios?
- How might AMC and other financially strained theater chains fare if more content were to go directly to streaming?
- How would Netflix integrate Warner’s production footprint without disrupting ongoing film and television projects?
- Could Netflix’s control of a major studio accelerate the shift away from traditional theatrical releases?
Together, these questions underscore how a Netflix–Warner deal could influence not only the companies involved but also the direction of the entertainment industry as a whole.