Netflix has agreed to purchase Warner Bros Discovery’s TV, film, and streaming division for $72 billion, marking a major expansion for the streaming giant into traditional Hollywood.
The deal would give Netflix control over Warner Bros’ century-old content library, including franchises such as Harry Potter, Game of Thrones, and DC Comics’ superheroes.
Netflix Co-CEO Ted Sarandos described the acquisition as a rare opportunity to further the company’s mission of global entertainment.
“Over the years, we have been known as builders, not buyers… but this is a rare opportunity that’s going to help us achieve our mission to entertain the world, and bring people together through great stories,” he said during a call with investors.
The agreement follows a bidding war with Paramount Skydance, which also sought Warner Bros Discovery assets. Netflix’s offer of nearly $28 per share surpassed its rivals, securing the deal. Each Warner Bros Discovery shareholder will receive $23.25 in cash and $4.50 in Netflix stock per share, valuing the transaction at $27.75 per share, or roughly $72 billion in equity ($82.7 billion including debt).
The acquisition is expected to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, into a separate publicly listed company, now scheduled for the third quarter of 2026. Netflix has agreed to a $5.8 billion breakup fee if it backs out, while Warner Bros Discovery would pay $2.8 billion if the deal collapses.
The deal faces potential antitrust scrutiny in the U.S. and Europe, as it would combine the world’s largest streaming service with HBO Max, home to nearly 130 million subscribers.
Industry experts have warned of possible resistance from Hollywood unions and cinema operators, who say the acquisition could reduce competition and affect theatrical releases.
Netflix plans to maintain Warner Bros films in cinemas and could bundle HBO Max with its streaming service, aiming to benefit consumers while expanding its original content output. The company also expects $2 billion to $3 billion in annual cost savings by the third year after closing.
Analysts say the acquisition positions Netflix to secure long-term rights to hit shows, expand into gaming, and diversify revenue streams as subscriber growth slows.
Warner Bros Discovery’s successful gaming titles, including Hogwarts Legacy, could bolster Netflix’s ambitions in the interactive entertainment space.
