Netflix’s $72 Billion Acquisition of Warner Bros Discovery Studios: What It Means for the Future of Streaming and Investment Opportunities
On Friday, Netflix agreed to acquire Warner Bros Discovery’s television, film studios, and streaming division for $72 billion. This landmark deal would transfer control of one of Hollywood’s most prestigious and historic assets to the streaming giant.
The agreement culminates a weeks-long bidding war, with Netflix offering nearly $28 per share. This bid surpassed Paramount Skydance’s offer of nearly $24 per share for the entirety of Warner Bros Discovery, including cable TV assets set for a spinoff.
Acquiring the owner of iconic franchises such as Game of Thrones, DC Comics, and Harry Potter will further shift Hollywood’s power dynamics in Netflix’s favor. Until now, Netflix’s dominance has been built without major acquisitions or an extensive content library.
Netflix Co-CEO Ted Sarandos expressed optimism, saying the merger would “help define the next century of storytelling.” He previously acclaimed the ambition "to become HBO faster than HBO can become us."
Following the announcement, Warner Bros Discovery shares rose nearly 4.4 percent to $25.60 in premarket trading. Meanwhile, Netflix shares fell approximately 3 percent, and Paramount’s stock dropped by about 2.2 percent.
Paramount and Comcast, which also showed interest, have not yet commented on the deal. Notably, CNBC reported that Paramount had offered $30 a share for Warner Bros Discovery, though this has not been independently verified or dated.
The Netflix acquisition will likely face intense antitrust scrutiny in both Europe and the United States. This is due to Netflix becoming the owner of a direct competitor boasting nearly 130 million subscribers through HBO Max.
Paramount, led by David Ellison and a prominent participant in the bidding war, criticized the sale process, alleging preferential treatment toward Netflix. Some U.S. lawmakers echoed concerns, suggesting the deal could negatively impact consumers and the broader Hollywood industry.
Cinema United, a global trade association for movie theaters, described the acquisition as an "unprecedented threat" to cinemas worldwide. Former WarnerMedia CEO Jason Kilar also warned, saying there could be "no more effective way to reduce competition in Hollywood than selling Warner Bros Discovery to Netflix."
Addressing such concerns, Netflix assured that the deal would expand its library of shows and films, increase production in the United States, and create more jobs and opportunities for creative talent. The company also emphasized that combining its streaming platform with HBO Max could offer consumers a more affordable bundled service.
Reports indicate Netflix intends to continue releasing Warner Bros Discovery’s films in theaters, aiming to alleviate fears over losing another major studio devoted to theatrical releases.
"Given the current regulatory environment, this deal will raise eyebrows and concerns," noted Paolo Pescatore, analyst at PP Foresight. "The combined dominant streaming player will face heavy scrutiny."
— Reuters
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