In a watershed move, Warner Bros. Discovery said Friday it has agreed to sell its movie, television and streaming assets to Netflix in a deal valued at $82.7 billion, setting the stage for one of the most sweeping and consequential mergers in modern Hollywood history.
If approved by federal regulators, the transaction promises to create a new entertainment and media behemoth, uniting the world’s largest streaming destination with a storied 102-year-old film studio.
Warner Bros.’ portfolio includes HBO, the HBO Max streaming platform and the “Harry Potter” movie franchise. Netflix, home of “Stranger Things” and “Squid Game,” reaches more than 300 million paid subscribers across over 190 countries.
“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a news release. “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,” Sarandos added.
Netflix’s takeover of Warner Bros. would usher in a new era for Hollywood, which has evolved from a business focused on theatrical exhibition to an increasingly digital-first industry. The acquisition cements Netflix’s market dominance and expands the company’s content library as it faces off against tech giants such as YouTube and TikTok.
The deal would give Netflix access to popular and lucrative intellectual property, including DC Comics characters such as Batman and Superman; the “Game of Thrones” TV saga; and a vast trove of titles stretching from Hollywood's classical era to the age of CGI-powered fantasy epics.
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In the lead-up to the announcement, Netflix attempted to reassure the creative community by reportedly promising to release Warner Bros. movies in brick-and-mortar cinemas. But many filmmakers are deeply skeptical of Netflix’s business model, which prioritizes streaming distribution over theatrical releases. Netflix typically releases only a handful of titles in select cinemas for short runs.
In a news release Friday announcing the deal, the two companies said that the acquisition would be a mix of cash and stock that valued Warner Bros. Discovery at $27.75 per share, with an enterprise value of $82.7 billion and an equity value of $72 billion, which takes into account Warner Bros. debt.
As of Thursday trading, Warner Bros. Discovery’s entire market capitalization — the value of the company based on its stock price — was $60 billion.
The size of Netflix’s offer for Warner’s streaming and HBO divisions was striking, with the streaming giant paying $72 billion for just those two divisions, more than the entire current company‘s $60 billion market value. To help complete the cash part of the deal, Netflix said it would take out a $59 billion bridge loan from three major banks.
Warner Bros. Discovery, weighed down by billions in debt and lackluster streaming growth, formally put itself up for sale in the fall. The company’s suitors included Paramount Skydance and Comcast, which each made bids in a largely secretive process. (Comcast owns NBCUniversal, the parent company of NBC News.)
“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,” David Zaslav, president and CEO of Warner Bros. Discovery, said in a news release.
“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture,” Zaslav added. “By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
If the deal goes through, Zaslav would not stay with the combined company, according to a source familiar with the matter.
The tie-up would not include Warner-owned cable channels such as CNN, TNT and TBS.
Paramount was widely seen as the front-runner in the bidding war because of the company’s deep pockets and political ties. Paramount Chairman and CEO David Ellison is the son of Silicon Valley magnate Larry Ellison, a friend of President Donald Trump.
The corporate union between Warner Bros. and Netflix still faces potential antitrust scrutiny and political challenges.
In late November, three senators — Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut, both Democrats, and Bernie Sanders of Vermont, an independent — sent a letter to the Justice Department Antitrust Division warning that any potential Warner Bros. merger could be tainted by “political favoritism and corruption.”
Rep. Darrell Issa, R-Calif., sent a letter to Attorney General Pam Bondi the same month, cautioning that merging Netflix with HBO Max would create a company with a more than “30 percent share of the streaming market: a threshold traditionally viewed as presumptively problematic under antitrust law.”
In early December, an anonymous group of “concerned feature film producers” reportedly sent a letter to Congress urging them to publicly oppose Netflix’s bid and give the potential deal “the highest level of antitrust scrutiny,” according to Variety.
The deal could also draw attention from state regulators.
In a statement, a spokesperson for the California attorney general’s office said: “The Department of Justice believes further consolidation in markets that are central to American economic life — whether in the financial, airline, grocery, or broadcasting and entertainment markets — does not serve the American economy, consumers, or competition well.”
“We are committed to protecting consumers and California’s economy from consolidation we find unlawful,” the spokesperson added.
Warner Bros. has been owned by various corporate entities since its founding in 1923, and the company’s recent history is especially complex. It was acquired by AT&T for $85 billion in 2016. AT&T then spun off the Warner Bros. assets, which were merged with Discovery in 2022.
