Netflix has decided to purchase Warner Bros. Discovery’s streaming and studio division using only cash, outmaneuvering Paramount in the ongoing battle between the two entertainment giants. This move, announced alongside Netflix’s fourth-quarter earnings, marks a significant development in the evolving landscape of the global entertainment industry.
The deal, valued at $72 billion in US equity, translates to $27.75 per share. According to a letter addressed to investors by Netflix, this agreement accelerates the timeline for a shareholder vote at Warner Bros. Discovery and ensures clarity regarding the value to be delivered upon closure.
The rivalry between Netflix and Paramount has been intensifying as both entities vie for different aspects of Warner Bros. Discovery. While Netflix is primarily interested in the studio business and streaming content, Paramount seeks to obtain the entire company, including assets like CNN and the Discovery+ streaming platform.
Geetha Ranganathan, a senior media analyst at Bloomberg Intelligence, raised questions about the necessity of the deal for Netflix. While it is considered crucial for Paramount Skydance under the leadership of new CEO David Ellison, Ranganathan suggested that Netflix’s subscriber growth slowdown has prompted a need for increased engagement to enhance its market position.
The vast content library of Warner Bros., featuring iconic franchises such as “Harry Potter,” popular TV shows like “Friends” and “Game of Thrones,” along with classic films like “Citizen Kane” and “Casablanca,” is seen as a significant asset that could significantly enhance Netflix’s business operations, according to Ranganathan.
The journey leading to this acquisition began in October 2025, when Warner Bros. Discovery first hinted at exploring a potential sale following its decision to split into two distinct companies. Amidst these developments, Netflix faced challenges, including missing third-quarter earnings targets and uncertainties regarding its long-term growth trajectory.
In November 2025, Netflix made a strategic move by committing to release Warner Bros. films in theaters, a departure from its traditional stance favoring digital distribution. This decision was aimed at strengthening its bid for Warner Bros. assets.
In December 2025, Paramount escalated its bid, prompting Warner Bros. Discovery to make a pivotal decision. Ultimately, Warner Bros. Discovery rejected Paramount’s hostile bid in January 2026, endorsing Netflix’s offer and urging shareholders to support the deal.
As the acquisition process progresses, the fate of the deal rests on a forthcoming shareholder vote, which could have significant implications for both Netflix and the broader entertainment industry. The evolving situation underscores the complexities and uncertainties surrounding this mega-deal.
