It’s official: Netflix, run by chairman Reed Hastings and co-CEOs Ted Sarandos and Greg Peters, has agreed to buy Warner Bros. in a deal valued at $82.7 billion.
The companies issued a press release early Friday announcing the deal, which will alter the course of the entertainment business. Netflix said that it expects to maintain the current operations of Warner Bros. “including theatrical releases for films,” though specifics aside from topline deal numbers remain scarce.
Netflix says the deal would give users more choice and let it “optimize its plans,” it will also expand its studio operations, while creating better value for talent and shareholders, with $2-$3 billion in annual cost savings.
Netflix also made its pitch to filmmakers and creatives, writing that “by uniting Netflix’s member experience and global reach with Warner Bros.’ renowned franchises and extensive library, the Company will create greater value for talent—offering more opportunities to work with beloved intellectual property, tell new stories and connect with a wider audience than ever before.”
WBD shareholders will receive $23.25 in cash and $4.50 in shares of Netflix common stock for each share of WBD common stock, with the linear networks business, including CNN, TNT HGTV and Discovery+ still set to be spun out. That move is now expected in Q3 2026.
“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix, in a statement. “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends—with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”
“This acquisition will improve our offering and accelerate our business for decades to come,” continued Greg Peters, co-CEO of Netflix. “Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
“Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most,” said David Zaslav, President and CEO of Warner Bros. Discovery. “For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Netflix has been described by Wall Street analysts as the winner of the “streaming wars.” And now, it is at the Hollywood gates and ready for its latest conquest, even if it is expected to face heavy regulatory scrutiny. The news came after reports that it was in exclusive talks with Warner Bros. Discovery to acquire its streaming and, ironically, studios business.
Not only is it understood to have made the highest offer in terms of financial valuation. A Netflix deal would also allow WBD to go through with the planned separation of its networks business and allow WBD CFO Gunnar Wiedenfels to become CEO of that Global Networks business.
Why is Netflix buying Warner Bros. and HBO? “Above all, the flow of new content which drives the majority of Netflix engagement,” Wolfe Research analyst Peter Supino said in a recent report. “Content released in the last year makes up only about 5 percent of the titles on Netflix but drives over 20 percent of Netflix viewing, reflecting that Netflix engagement increases/ decreases when content spend goes up/down.”
Bank of America analyst Jessica Reif Ehrlich, in a recent report, described the auction of WBD this way: “The global media industry stands at the precipice of historic transformation, with WBD positioned at the epicenter.”
And she argued that Netflix sealing a deal for WBD’s studios and streaming operations would allow it to kill three birds with one stone. “The bidding war for WBD’s streaming and studio assets reflects the economic reality of the 2025 media environment that mid-sized legacy media studios/companies can no longer compete with the unit economics of Netflix or the ecosystem of large tech players, such as Amazon,” she explained. “Ultimately, an acquisition may be existential for both Paramount Skydance and [Comcast‘s] NBCUniversal, and therefore, aside from potential direct financial benefits, an acquisition by Netflix could potentially be killing three birds with one stone – as WBD would be housed within Netflix and Paramount Skydance and NBCU/Peacock would, in our view, have difficulty remaining competitive.”
Morgan Stanley analyst Benjamin Swinburne has previously also highlighted the intellectual property that Netflix would get its hands on in a WBD deal. “There are only a handful of 100-plus-year-old Hollywood studios, with Warner Bros. tracing back to 1923,” he wrote in a recent report. “In addition to a deep library of titles, Warner Bros. is of fairly unmatched scale among studios with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of over $2.5 billion and growing. Perhaps most interesting to Netflix, it owns or has exclusive rights to several iconic franchises that could be exploited for decades to come – including DC Comics, Harry Potter, and Lord of the Rings. Finally, it brings talent relationships, production assets, and global distribution scale.”
The same is true for HBO and HBO Max. “HBO brings its own set of IP, built over the past few decades, with HBO original series,” Swinburne highlighted. “It also has a brand still largely synonymous with prestige TV. HBO has also largely made the pivot from linear distribution to streaming, implying Netflix would have minimal exposure to legacy TV headwinds. We estimate only 10-15 percent of its roughly 130 million global subscribers are still signed up through wholesale [pay TV] packages.”
The biggest hurdle for a Netflix-WBD combination is widely seen as being regulatory concerns. But that is more of a headache for the streamer rather than WBD. Even before news of the exclusive talks, Bernstein analyst Laurent Yoon argued that going with Netflix’s takeover bid was a win-win for the seller, given reports that the streamer has offered a $5 billion break-up fee in case the deal can not be completed. “WBD faces little downside – at least one worth taking,” he wrote. “Either they get acquired by Netflix – 85 percent cash! – or they walk away with free capital to fund the next phase of growth. And more than $5 billion is enough to produce more than 20 Superman-scale blockbuster films. That’s not a bad outcome either.”