Netflix has sweetened its $72B US bid for Warner Bros. Here’s how the deal happened

Netflix will pay Warner Bros. Discovery’s streaming and studio division entirely in cash to unseat rival Paramount — the latest chapter in a months-long saga that, once concluded, could significantly alter the global entertainment industry.

The streaming giant announced the move on the same day as its fourth-quarter earnings. The $72 billion US equity value of the deal, which amounts to $27.75 US per share, “accelerates the timeline for the WBD shareholder vote and provides greater certainty of the price that will be delivered at closing,” Netflix wrote. a letter to investors On Tuesday.

Netflix and Paramount have been dueling over this deal for months. While Netflix is ​​competing for the company’s studio business and streaming catalog, Paramount is looking to acquire the entire company — which would include CNN and the Discovery+ streaming channels.

Geeta Ranganathan, senior media analyst at Bloomberg Intelligence, questioned whether the deal was a “must have” or a “nice to have” for Netflix.

Ranganathan said the deal was considered significant for Paramount Skydance under new CEO David Ellison and less significant for Netflix. However, Netflix’s subscriber growth has slowed, worrying investors, and it now relies on engagement to boost its value.

To that end, Warner Bros.’ Extensive catalog – including major franchises harry potterTV hits like Friend, sopranos And game of Thronesand classic movies like citizen Kane And casablanca This will help Netflix grow its business “dramatically”, Ranganathan said.

So how did we get here and what happens next?

October 2025: WBD says it is exploring the possibility of sale

Months after Warner Bros. Discovery announced It will eventually split itself into two companies, with Warner Bros. handling the studios and film/TV library and Discovery Global handling properties like CNN and Discovery+, with the company indicating in mid-month that it is Search for potential sales Of business.

Paramount’s starting bid to buy the entire company is about US$24 per share reportedly rejected.

Around the same time, Netflix missed its third-quarter earnings target due to a dispute with Brazilian tax authorities. investors remain worried About the streaming giant’s ability to sustain long-term growth.

During that earnings call, Netflix CEO Ted Sarandos — who has long emphasized that the streamer is a builder, not a buyer — says the company Will be open to “selective” mergers and acquisitions, but has no interest in buying legacy media networks.

at the end of the month, reports emerge Netflix is ​​exploring a bid for WBD’s streaming and studio division Warner Bros.

November 2025:Netflix pledges to release WB films in theaters

Netflix then tried to increase its bid for Warner Bros. by promising that the company would continue to release the studio’s films in theaters, according to Bloomberg News.

Netflix, based on its business model, has long maintained that people would prefer to watch movies at home rather than in theaters. But in recent years it has had to accept theatrical windows. please the filmmakers And To qualify for the Oscars.

December 2025:Netflix’s $72B deal and Paramount’s hostile bid

Paramount has increased its proposed breakup fee (a penalty to be paid to WBD if the deal does not go through) from US$2.1 billion to US$5 billion.

A few days later, WBD announced that Netflix to acquire Warner Bros. The separation from Discovery Global will total $72 billion in cash and stock. US President Donald Trump, who is friendly with the Ellison family, says he will join a review of the deal.

Members of the US Congress and Hollywood unions criticize the deal. some politicians call it a “nightmare” to US antitrust regulators, and unions say This would lead to job cuts, a reduction in theatrical releases, and consolidation of power in the entertainment industry.

Now, after several rejections, Paramount Launches hostile bid of $108.4 billion Against the wishes of the WBD board of directors and its CEO David Zaslav.

its quote is allegedly supported several Middle Eastern investment funds, and temporarily by Trump’s son-in-law Jared Kushner. Billionaire Larry Ellison (whose son, David, is CEO of Paramount) gives personal guarantee To support the proposal.

January 2026: WBD rejects Paramount, supports Netflix

in the new Year WBD rejects Paramount’s hostile bid And calling on investors to do the same, calling it a risky proposition on borrowed funds.

Instead, the company actively encourages shareholders to vote for the Netflix deal. Both companies have launched a marketing campaign promoting the benefits of their partnership.

“The amount of debt Paramount would have to take on to support the transaction would be staggering,” analyst Ranganathan said.

“I think (WBD) generally thinks that the bigger the Netflix brand, the better. Netflix will be a better steward of their properties, all of their brands, all of their properties,” he said.

Last week, Paramount stepped up its aggressive pursuit of WBD, suing the company for details of its deal with Netflix and announcing plans to nominate directors to the WBD board.

what happens next?

with netflix Now offering all cashA shareholder vote on the deal will come soon, Ranganathan said, which “is going to be a drop-dead deadline for Paramount.”

“Even if (US) regulators approve it, we don’t know what will happen after that,” the analyst said. For example, Netflix could find itself in an antitrust conundrum where it would be forced to choose between Warner Bros. film studios and HBO, she said.

“Are they really going to keep the movie business? Are they going to keep HBO? There are a lot of ifs and buts here, which I think is going to weigh heavily on the stock and sentiment.”