Netflix has announced a definitive agreement to acquire Warner Bros. Discovery (WBD) in a transaction valued at $72 billion in equity and $83 billion in total enterprise value, marking one of the largest mergers in entertainment history.
The acquisition will bring Warner Bros.’ iconic film and television studios, HBO, HBO Max, and a vast library of premium content under the Netflix umbrella.
The deal excludes WBD’s cable networks, which will spin off into a separate publicly traded company. Netflix expects the acquisition to close after Q3 2026, pending regulatory approval and the formal separation of WBD’s global networks division.
Transformative Deal with Big Industry Implications
For Netflix, already a global powerhouse in subscription streaming and advertising, this acquisition represents a major escalation. The company has recently expanded its advertising capabilities, including a selling partnership with Amazon’s DSP and integration of video podcasts with Spotify, and the addition of Warner Bros. further strengthens its position.
The merger will significantly increase Netflix’s content scale, combining franchises such as Game of Thrones, Harry Potter, Friends, and DC films with Netflix originals like Stranger Things, Squid Game, and KPop Demon Hunters.
However, the deal is far from guaranteed. Given its size and potential impact on competition, the transaction is expected to face rigorous regulatory scrutiny in the U.S. and internationally.
Industry Concerns and Regulatory Hurdles Ahead
Experts warn that the consolidation of two major studios raises concerns about reduced competition, especially in theatrical movie releases. Jason Kilar, former Warner Bros. CEO, commented:
“I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix.”
Netflix has stated it will maintain wide theatrical releases for Warner Bros. films, but regulators are expected to closely examine how the merger affects consumers, creators, and distribution businesses.
Political pressure may also shape the outcome. Paramount Skydance, which previously bid for WBD, argued that a Netflix acquisition would struggle to secure approval. Reports indicate that White House officials have expressed concerns as well.
How This Changes the Streaming and Advertising Landscape
If approved, the deal would create an entertainment titan with unmatched content scale and global reach, particularly in advertising where scale directly influences competitiveness. Industry observers highlight several implications:
Netflix’s ad business could gain major acceleration. Both Netflix and HBO Max share ad light, high CPM philosophies.
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The combined catalog will compete more aggressively against platforms that monetize user generated content such as YouTube.
Brands and agencies may face a more consolidated video marketplace, raising questions about incremental reach and media diversity.
Context: A Fiercely Contested Bidding War
The acquisition follows months of speculation and competitive bids. Paramount Skydance, Comcast (NBCUniversal Peacock), and Netflix each pursued different configurations of WBD assets. Ultimately, Netflix emerged as the preferred buyer for WBD’s studio and streaming operations, while the cable networks will be spun out separately.
Earlier this week, Paramount criticized the process as tilted and unfair, arguing that regulators would likely reject a Netflix WBD merger.
Why Netflix Is Buying Warner Bros. Discovery
Netflix co CEO Greg Peters said the merger reflects the company’s long-term vision to expand its entertainment ecosystem:
“Warner Bros. has helped define entertainment for more than a century. With our global reach, we can introduce broader audiences to the worlds they create, giving viewers more options and strengthening the entire entertainment industry.”
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Co CEO Ted Sarandos added that the combination of timeless Warner Bros. classics such as Casablanca, Citizen Kane, and contemporary hits like Harry Potter with Netflix’s culture defining originals will help define the next century of storytelling.
Although Netflix has historically favored organic growth, Sarandos acknowledged that this megadeal marks a significant shift in strategy.
What’s Next
The agreement marks a watershed moment for Hollywood, but the path to completion will be long and politically sensitive. With more than $5 billion in insurance protections built into the deal, both companies acknowledge the regulatory uncertainty ahead.
If approved, the integration of Netflix and Warner Bros. Discovery will reshape global entertainment, altering how films are released, how audiences consume content, and how advertisers engage viewers in a rapidly consolidating streaming landscape.
Source: warc
