Netflix Agrees $82.7bn Warner Bros Discovery Takeover in Seismic Hollywood Deal

Whilst this is not really gaming related, Netflix is technically partially a game studio now. So that's our excuse to write about this.

Hollywood just witnessed its biggest shake-up in decades.

Netflix and Warner Bros Discovery confirmed this morning they've reached an agreement worth $82.7 billion. The streaming giant will acquire Warner Bros' film and television studios, HBO Max, and HBO in a cash-and-stock transaction valued at $27.75 per WBD share.

This closes a bidding war that saw Netflix beat out Paramount Skydance and Comcast for one of entertainment's most storied studios. The deal brings an enterprise value of roughly $82.7 billion (including debt) and an equity value of $72 billion.

What Netflix Gets

The acquisition hands Netflix control of:

• Warner Bros' century-old film library (Casablanca, Citizen Kane, The Wizard of Oz)
• Modern blockbusters (Harry Potter franchise, DC Universe characters including Batman and Superman)
• HBO's prestige television catalogue (The Sopranos, Game of Thrones, The Wire)
• Current streaming platform HBO Max with 128 million subscribers
• Warner Bros' production studios and facilities

Ted Sarandos, Netflix co-CEO, framed the move as mission-critical. "By combining Warner Bros' incredible library of shows and movies with our culture-defining titles like Stranger Things and Squid Game, we'll be able to entertain the world even better," he stated.

The deal pairs Netflix originals (Wednesday, Bridgerton, Money Heist) with Warner classics. Greg Peters, Netflix's other co-CEO, emphasised Warner Bros' "phenomenal creative executives and production capabilities" as key attractions.

Timing and Regulatory Hurdles

Here's where things get tricky.

The transaction won't close until after WBD completes its previously announced spin-off of Discovery Global (its TV networks division including CNN and TNT). That separation is now targeted for Q3 2026.

Antitrust scrutiny looms large. Republican Representative Darrell Issa warned regulators in November that combining Netflix's streaming dominance with HBO Max would "diminish incentives to produce new content and major theatrical releases."

Senator Mike Lee called the potential transaction more concerning than "any I've seen in about a decade" from a competition standpoint. Former DOJ antitrust official Jonathan Kanter described it as "the hardest from a regulatory perspective."

Netflix offered a massive $5 billion breakup fee if regulators block the deal. That signals confidence, but also acknowledges the regulatory minefield ahead.

The Bidding War Drama

Paramount didn't go quietly.

David Ellison's company accused Warner Bros Discovery of running a "tainted" and "unfair" sales process that favoured Netflix. In letters to WBD CEO David Zaslav, Paramount's lawyers claimed the board had "embarked on a myopic process with a predetermined outcome."

Paramount argued its bid faced fewer regulatory obstacles. The company wanted to buy all of WBD, not just the studio and streaming assets Netflix targeted. Comcast also submitted rival offers but couldn't match Netflix's terms.

WBD's board defended its process, stating it "attends to its fiduciary obligations with the utmost care." The company had received three earlier bids from Paramount before opening the formal auction process in October.

Industry Concerns Mount

Cinema operators are panicking.

Cinema United warned that Netflix's acquisition "poses an unprecedented threat to the global exhibition business." The trade body noted Netflix's business model doesn't support theatrical releases, raising fears about further cinema closures.

Anonymous A-list filmmakers sent an open letter to Congress warning Netflix would "hold a noose around the theatrical marketplace" by reducing cinema output and driving down licensing fees.

James Cameron reportedly called the deal a "catastrophic long-term loss of value" for entertainment.

The Directors Guild of America raised similar alarms about theatrical distribution.

What Happens to David Zaslav?

Good question.

Zaslav restructured his compensation package last month to account for a potential sale. Under the original spin-off plan, he would've become CEO of the slimmed-down Warner Bros, with CFO Gunnar Wiedenfels running Discovery Global.

His role in a Netflix-owned Warner Bros remains unclear. The companies haven't announced leadership plans beyond the executive quotes.

Market Reaction

Warner Bros Discovery shares jumped nearly 6% to $26 in late trading Thursday. That represents a 52-week high and almost quadruple the year's low of $7.50.

The stock had been sluggish since Discovery acquired WarnerMedia in April 2022. Word of the bidding war sent shares rocketing back toward previous highs.

Netflix shares fell 5% Wednesday when investors realised the deal might actually happen. Concerns centre on integration costs, regulatory delays, and whether HBO Max subscribers overlap too much with Netflix's existing base.

The Stakes

Bank of America analyst Jessica Reif Erlich described Warner Bros Studio as a "crown jewel" with IP from Harry Potter to DC Comics to Game of Thrones.

"All three buyers were willing to pay for the elimination of a competitor, the acquisition of franchise control, and the synergy potential," she wrote.

This marks Netflix's biggest acquisition ever. The company has historically avoided major purchases, preferring organic growth. Co-CEO Greg Peters criticised big media mergers just two months ago as not having an "amazing track record."

That makes this reversal all the more striking.

What's Next

The companies hope to announce more details soon. Both regulatory approval processes (US and international) and the Discovery Global spin-off must complete before the deal closes.

European regulators will likely scrutinise the deal alongside US authorities. Sources told CNN that perceptions of political favouritism in the US could hurt any buyer in overseas markets.

California Attorney General Robert Bonta previously opposed WBD deals, warning that "further consolidation in markets central to American economic life does not serve the economy, consumers or competition well."

David Zaslav praised the combination. "For more than a century, Warner Bros has thrilled audiences and shaped our culture," he said. "By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world's most resonant stories for generations to come."

Whether regulators agree remains the $82.7 billion question.