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

Netflix will pay for Warner Bros. Discovery’s streaming and studio division entirely in cash to edge out its rival Paramount — the latest chapter in a months-long saga that, once concluded, could significantly change 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 deal, amounting to $27.75 US per share, “expedites the timeline to a WBD shareholder vote and provides greater certainty of value that will be delivered at closing,” Netflix wrote in a letter to investors on Tuesday.

Netflix and Paramount have been duelling over the deal for months. While Netflix is vying for the company’s studio business and streaming catalogue, Paramount wants to acquire the entire company — which would include the likes of CNN and the Discovery+ streaming channel.

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

The deal is largely seen as critical for Paramount Skydance under the helm of new CEO David Ellison, and less so for Netflix, said Ranganathan. However, Netflix’s subscriber growth has slowed, worrying investors, and it’s now relying on engagement to boost its value.

To that end, Warner Bros.’ deep catalogue — which includes major franchises like Harry Potter, TV hits like Friends, The Sopranos and Game of Thrones, and classic films like Citizen Kane and Casablanca — would help Netflix scale its business “dramatically,” said Ranganathan.

So how did we get here, and what happens next?

Oct. 2025: WBD says it’s exploring a sale

Months after Warner Bros. Discovery announced that it will eventually split itself into two companies, with Warner Bros. handling the studio and film/TV library and Discovery Global handling properties like CNN and Discovery+, the company signals mid-month that it’s exploring a potential sale of the business.

Paramount’s initial bid to buy the entire company for nearly $24 US a share is reportedly rejected.

Around the same time, Netflix misses its third quarter earnings targets thanks to a dispute with Brazilian tax authorities. Investors remain worried about the streaming giant’s capacity to sustain long-term growth.

During that earnings call, Netflix CEO Ted Sarandos — who has long insisted that the streamer is a builder, not a buyer — says the company would be open to “selective” mergers and acquisitions, but isn’t interested in buying legacy media networks.

At the end of the month, reports emerge that Netflix is exploring a bid for Warner Bros., the streaming and studio division of WBD.

Nov. 2025: Netflix vows to release WB films in theatres

Netflix then tries to sweeten its bid for Warner Bros. by promising that the company will keep releasing the studio’s movies in theatres, according to Bloomberg News.

Netflix, by virtue of its business model, has long maintained that people would rather watch movies at home than in theatres. But it’s had to concede to theatrical windows in recent years to appease filmmakers and to qualify for the Oscars.

Dec. 2025: Netflix’s $72B deal & Paramount’s hostile bid

Paramount raises its proposed breakup fee (the penalty it pays to WBD in the event that a deal doesn’t go through) from $2.1 billion US to $5 billion.

Just a few days later, WBD announces that Netflix will acquire Warner Bros. for a total of $72 billion in cash and stock after its separation from Discovery Global is complete. U.S. President Donald Trump, who is friendly with the Ellison family, says he’ll be involved in a review of the deal.

Members of U.S. Congress and Hollywood unions criticize the deal. Some politicians call it a “nightmare” for U.S. antitrust regulators, and unions say it will lead to job cuts, fewer theatrical releases, and consolidation of power in the entertainment industry.

Now having been rejected multiple times, Paramount launches a $108.4 billion hostile bid against the wishes of the WBD board of directors and its CEO David Zaslav.

Its bid is reportedly backed by several Middle Eastern investment funds, and temporarily by Trump’s son-in-law, Jared Kushner. Billionaire Larry Ellison (whose son, David, is the CEO of Paramount) makes a personal guarantee to back the offer.

Jan. 2026: WBD rejects Paramount, supports Netflix

In the new year WBD rejects Paramount’s hostile bid and calls on investors to do the same, characterizing it as a risky offer leveraged on borrowed money.

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

“The amount of debt that Paramount is going to have to take in order to support the transaction is going to be staggering,” a huge risk if the deal goes south, said Ranganathan, the analyst.

“I think that [WBD] just generally think that the Netflix brand is bigger, better. Netflix will be a better steward of their assets, of all their brands, of all the properties,” she added.

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

What happens next?

With Netflix now offering all-cash, a shareholder vote on the deal will come sooner, said Ranganathan, which is “going to be the drop-dead deadline for Paramount.”

“Even if [U.S.] regulators approve it, we don’t know what’s going to happen after that,” the analyst added. For example, Netflix might find itself in an antitrust conundrum where it’s forced to choose between the Warner Bros. film studio and HBO, she said.

“Are they actually going to keep the film business? Are they going to keep HBO? There are just so many ifs and buts here, which is what I think is weighing on the stock and on the sentiment quite a bit.”