In a landmark move set to redefine the global entertainment landscape, streaming behemoth Netflix has agreed to purchase the television and film studios, along with the streaming division, of Warner Bros Discovery for a staggering $72 billion. The announcement, made on Friday, December 5, 2025, marks a seismic shift, transferring control of one of Hollywood's most storied assets to the digital pioneer that originally disrupted the traditional media model.
The Bidding War and Deal Structure
The agreement culminates a fierce, weeks-long bidding war. Netflix emerged victorious with an offer of nearly $28 per share, outbidding a rival bid of approximately $24 per share from the Paramount Skydance consortium, which had sought the entirety of Warner Bros Discovery, including its cable TV assets. Warner Bros Discovery shares had closed at $24.5 on Thursday, valuing the company at about $61 billion prior to the deal's announcement.
Under the finalized terms, each Warner Bros Discovery shareholder will receive $23.25 in cash and roughly $4.50 in Netflix stock per share. This values Warner at $27.75 per share, translating to an equity value of $72 billion and a total enterprise value of approximately $82.7 billion when debt is included. The transaction is expected to close after Warner Bros Discovery completes the spinoff of its global networks unit, Discovery Global, into a separate listed company, a process now scheduled for the third quarter of 2026.
Reshaping Hollywood's Power Dynamics
This acquisition dramatically tilts the balance of power in Hollywood. Netflix, which built its dominance primarily through original content and a subscription model without major acquisitions, will now take command of iconic franchises like Game of Thrones, DC Comics, and Harry Potter. This vast content library significantly bolsters its arsenal in the intensifying battle for subscribers against giants like Walt Disney and the Ellison family-backed Paramount.
Netflix co-CEO Ted Sarandos stated, "Together, we can give audiences more of what they love and help define the next century of storytelling." Analysts suggest Netflix is driven by a desire to secure long-term rights to hit shows and films, reducing reliance on external studios as it expands into gaming and seeks new growth avenues following its successful password-sharing crackdown.
To address concerns within the film industry, Netflix has reportedly assured Warner Bros Discovery that it will continue to release the studio's films in cinemas, aiming to calm fears that the deal would eliminate a major source of theatrical movies.
Antitrust Hurdles and Competitive Scrutiny
The colossal deal is anticipated to face intense antitrust scrutiny from regulators in both the United States and Europe. The primary concern is that it would grant the world's largest streaming service ownership of a key rival, HBO Max, which boasts nearly 130 million streaming subscribers, potentially reducing market competition.
David Ellison-led Paramount, which initiated the bidding war with unsolicited offers, has already questioned the sale process. In a letter this week, it alleged favorable treatment towards Netflix. In response, Netflix has argued during deal talks that combining its service with HBO Max could benefit consumers by lowering the cost of a potential bundled offering.
Financially, Netflix projects the merger will yield annual cost savings of $2 billion to $3 billion by the third year after closure. Following the announcement, Netflix shares dipped nearly 3% in premarket trading, while Paramount's stock fell 2.2%.
