Should Netflix and Warner Bros. Discovery reach a deal, it would mark a seismic transformation in the media and entertainment landscape. As the leader in paid streaming services, Netflix has grown into far and away the largest and most influential company in Hollywood, with a market cap of $437 billion, far eclipsing even Disney ($190 billion).
Netflix did not buy its way into Hollywood; it built up into a dominant position by starting as the first premier streamer, beginning with a library of licensed content from traditional studios before developing original content, with outside studios as well as wholly owned productions such as the “Stranger Things” fantasy franchise.
NETFLIX has entered exclusive talks with Warner Bros. Discovery to acquire the company’s film and television studio, as well as the HBO Max streaming service, Variety confirms.
The development comes after a weeks-long bidding war for the assets at Warner Bros. Discovery between Netflix and rivals Paramount, Skydance and Comcast. Paramount Skydance, under the newly minted studio CEO David Ellison, had sought to acquire the entirety of Warner Bros. Discovery in an all-cash deal, while both Netflix and Comcast only submitted bids for the company’s studio and streaming businesses. News of the exclusive window was first reported by Bloomberg News.
The move marks a shocking turnaround for Netflix, which for years has resisted opportunities to make a big bet on traditional Hollywood assets. Ted Sarandos and Greg Peters, Netflix’s co-CEOs, have long asserted that the company’s growth was not hampered by the lack of a deep content library. But the chance to acquire the vast Warner Bros. film and TV library and the equally renowned HBO brand was too enticing to pass up. Any deal would undoubtedly face a difficult road to securing regulatory approval, given the unpredictability of the Trump administration. Already, the Directors Guild of America and Cinema United, the exhibition trade organisation, issued statements with warnings that the marriage of Netflix and WBD would have dire consequences for theatrical moviegoing.
The news follows months of speculation and anxiety in the larger entertainment and media sector surrounding the potential sale of Warner Bros. Discovery. Ellison’s Paramount was the first and, arguably, most aggressive bidder at roughly $27 per share for the whole of Warner Bros. Discovery. Netflix and Comcast came in later to solidify an intense horse race.
The bidding war saw the highest offers submitted on Monday. Paramount went nuclear Thursday morning, accusing Netflix of impropriety surrounding its bid for the legendary studio, arguing that it “has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation.”
Paramount’s offer submitted on Monday included financial backing of three Middle Eastern sovereign wealth funds, Variety reported.
Warner Bros. Discovery, the byproduct of a hastily arranged 2022 marriage of AT&T’s WarnerMedia and Discovery Communications, was thrust into M&A play in October when David Ellison made an unsolicited offer for the entirety of the WBD.
Prior to the Ellison move, Warner Bros. Discovery chief David Zaslav and the board opted to address the company’s stock price slump with a spinoff plan that would separate Warner Bros. studio and HBO Max streaming from the legacy linear cable channels (CNN, TNT, TBS et al) that defined the company’s strength in the Time Warner era. WBD confirmed plans to proceed with a spinoff plan that was projected to close by mid-2026. Ellison already had his eye on a WBD acquisition to add needed heft and scale to Paramount’s streaming and studio operations. But the WBD divestiture plan likely forced Ellison to act sooner rather than later.
Should Netflix and Warner Bros. Discovery reach a deal, it would mark a seismic transformation in the media and entertainment landscape. As the leader in paid streaming services, Netflix has grown into far and away the largest and most influential company in Hollywood, with a market cap of $437 billion, far eclipsing even Disney ($190 billion).
Netflix did not buy its way into Hollywood; it built up into a dominant position by starting as the first premier streamer, beginning with a library of licensed content from traditional studios before developing original content, with outside studios as well as wholly owned productions such as the “Stranger Things” fantasy franchise.
A deal would give Netflix rights to the Warner Bros. library — from “Casablanca” and “The Maltese Falcon” to “Friends” to “Ted Lasso” — and its IP, including Batman, Superman, Wonder Woman and other comic book characters at DC Studios. HBO’s library includes such landmark TV series as “The Sopranos,” “The Wire,” “Deadwood,” “Game of Thrones,” “Sex and the City,” “Curb Your Enthusiasm” and “Six Feet Under.” WBD’s assets also include broad film and TV rights to the Harry Potter franchise.
But a potential Netflix-WBD acquisition will also face an uphill battle in securing government approval for the deal, given Netflix’s size and market clout. On Thursday, Variety exclusively reported that a consortium of A-list talent signed an open letter to Congress, imploring members to speak out against a Netflix deal and arguing that the streamer would “effectively hold a noose around the theatrical marketplace” by reducing output to movie theatres and forcing down subsequent licensing fees for home video windows. The statement was signed anonymously, with an explanation that it was done so “not out of cowardice” but fear of retaliation, given Netflix’s considerable power in the marketplace.
Late Thursday, the Directors Guild of America issued a sharply worded statement underscoring its misgivings about the transaction.
“The news that Netflix had secured exclusive rights to negotiate for WBD raises significant concerns for the DGA,” the guild stated. “We believe that a vibrant, competitive industry — one that fosters creativity and encourages genuine competition for talent — is essential to safeguarding the careers and creative rights of directors and their teams. We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company. While we undertake this due diligence, we will not be commenting further.”
The deal has drawn particularly sharp criticism in the bedrock film production community and among exhibitors, who see Netflix’s strategic goals as a grave threat to the moviegoing tradition. However, sources close to Netflix urged onlookers to reserve judgment and speculation about its strategic approach to theatrical film releases amid the cut-throat dynamics of a bidding war. These sources said Netflix would naturally evaluate its film distribution protocols and corporate priorities if it were to make such a massive acquisition, such as Warner Bros., which is built to distribute films around the world.
Another dire warning about the consequences of a Netflix-WBD union came late Thursday from Cinema United, the exhibition industry trade organisation previously known as the National Association of Theatre Owners.
“The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business. The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” said Michael O’Leary, president and CEO of Cinema United. “Cinema United stands ready to support industry changes that lead to increased movie production and give consumers more opportunities to enjoy a day at the local theatre. But Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite. Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry.”
O’Leary didn’t shy away from pointing out the distinction between the medium in which Netflix has thrived — television — and theatrical films. He also pointed out trickle-down effects of moviegoing on restaurants, bars and other retailers, calling exhibitors “a Main Street industry.”
“Netflix’s success is television, not movies on the big screen. A true commitment to exhibition means a robust slate of movies with a meaningful period of theatrical exclusivity supported by marketing. Sporadic and truncated theatrical releases to meet awards criteria in a handful of theatres is not a commitment to exhibition,” O’Leary said.
“Movie theatres are cultural and economic anchors of communities of all sizes — we are a Main Street industry. Research shows that for each dollar spent in a local movie theatre, an additional $1.50 is spent in surrounding businesses in the community—restaurants, bars, shopping centres, and transportation. That is what is at risk here if we sanction fewer movies in the marketplace. Theatres will close, communities will suffer, jobs will be lost.”
(Cynthia Littleton contributed to this report.)
- https://variety.com/2025/biz/news/netflix-enters-deal-talks-buy-warner-bros-1236600804/
- https://variety.com/t/netflix/