Netflix will buy some of Warner Bros. Discovery’s most valuable media portfolio for nearly $83 billion in a cash-stock deal, the two companies said Friday, setting up one of the largest media mergers this decade.
The streaming giant will acquire some of Warner Bros. Discovery’s film and TV studio, as well as HBO and the streaming service HBO Max. Warner Bros.’s cable networks, including the news giant CNN, are to be spun off in advance of the merger. That plan was announced in June.
Combining the two companies’ vast media libraries will further Netflix’s ability to “entertain the world,” Ted Sarandos, the co-CEO of Netflix, wrote in a statement.
David Zaslav, president and chief executive of Warner Bros., said the deal will “ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Two other companies — Comcast and Paramount Skydance — were reportedly involved in a multi-round bidding war for the media conglomerate. Representatives for those companies did not respond to requests for comment on Netflix’s deal.
In a memo to Warner Bros. staff, Zaslav said the sale “reflects the realities of an industry undergoing generational change — in how stories are financed, produced, distributed, and discovered.”
“The proposed combination of Warner Bros. and Netflix reflects complementary strengths, more choice and value for consumers, a stronger entertainment industry, increased opportunity for creative talent, and long-term value creation for shareholders,” he wrote. Elements of Warner Bros. Discovery outside the deal, including the cable news channels CNN, TNT Sports and Discovery, will be part of a new stand-alone company called Discovery Global, Zaslav said, which he expected to be squared away by the third quarter of 2026.
The deal would require shareholder approval and regulatory approval from President Donald Trump’s administration. In its regulatory filing disclosing the terms of the deal, Netflix offered a $5.8 billion breakup fee should the deal fall apart as a result of antitrust or other legal challenges. The Justice Department did not respond to a request for comment about whether it would challenge the deal.
“Given what is happening in entertainment markets, the DOJ is very likely to take a close look,” said Diana Moss, director of competition policy at the Progressive Policy Institute, a center-left-leaning think tank. “There could be concerns over eliminating head-to-head competition and potential competition.”
Moss noted allegations by liberal lawmakers that the Trump administration interfered in similar mergers, including the Paramount-Skydance deal, to advance the president’s personal agenda. Paramount has said it “has no knowledge of any promises or commitments made to President Trump.” The White House did not immediately respond to a request for comment.
Warner Bros. has had discussions with lawyers at the Justice Department and the Federal Trade Commission as it considered potential buyers, said a person familiar with the conversations, who spoke on the condition of anonymity to characterize nonpublic discussions.
“All signs point to this is going to get challenged,” the person said, noting that the deal raises concerns that Netflix could hike subscription fees for consumers or put more content directly on streaming, harming theaters and actors. The person described antitrust chief Gail Slater as a “process person” who would conduct a thorough review.
Richard Rushfield, chief columnist at Hollywood insider newsletter the Ankler, said if the deal goes through, two major film studio mergers — Disney’s acquisition of Fox assets in 2017 and now this transaction — will have happened under Trump administrations.
“No one was even talking about a deal like this last year,” he said. “It’s the fact that we’re not living in a normal regulatory environment that opens the doors to all this.”
Telecommunications giant AT&T bought Time Warner in 2018 in an $85 billion deal. The Trump administration sued to block the transaction on antitrust grounds but was unsuccessful in court. The union nevertheless proved short-lived, as AT&T spun off its news and entertainment assets in 2022 and merged them with Discovery to create Warner Bros. Discovery.
If the Netflix-Warner Bros. deal goes through, said Mike Proulx, research director for the business research firm Forrester, “Netflix will cement itself as the Goliath of streaming services now with the combined weight of HBO Max and the content studios behind it all. This deal changes the calculus of the streaming wars, representing a seismic shift in the entertainment industry.”
Netflix had an estimated 69 million paying subscribers in the U.S. — nearly triple the reach of HBO Max — and one of the lowest churn rates in the industry in October, according to metrics from the data analytics start-up Antenna.
While Netflix’s long-term plans for theatrical releases remain unclear, the company’s leaders have clearly expressed their disdain for releasing movies in theaters, Rushfield said.
Netflix chief Sarandos called the movie theater approach “an outdated concept” in August. “If you’re fortunate to live enough in Manhattan, and you can walk to a multiplex and see a movie, that’s fantastic. Most of the country cannot,” he said in an interview with Time editor in chief Sam Jacobs.
Beyond any possible impact of the deal on cinemas, some critics have expressed concerns about the prospect of further concentration in the streaming market. Sen. Elizabeth Warren (D-Massachusetts) called the merger an “anti-monopoly nightmare.”
“A Netflix-Warner Bros. would create one massive media giant with control of close to half of the streaming market — threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk,” she wrote in a statement.
“One does not need a huge imagination to consider how this merger could harm consumers,” said Kellie Lerner, an antitrust lawyer and managing partner at Shinder Cantor Lerner. “As just one example, Netflix could remove beloved Warner content from rival streaming platforms and force consumers to subscribe to its own service to view it.”
Hollywood unions came out in opposition, too.
“We know how this movie ends,” Writers Guild of America President Michele Mulroney said in an interview with The Washington Post, calling out the AT&T-Time Warner and Warner Bros.-Discovery mergers.
“Mergers always promise benefits, but they inevitably deliver diminished competition, lower pay and fewer jobs for industry workers,” she said.
WGA will be urging state and federal leaders to help block the merger, which, if approved, will likely result in streaming service subscribers paying higher costs for fewer, less diverse offerings, Mulroney said.
Pamela Greenwalt, spokeswoman for the Screen Actors Guild, said in a statement that the potential deal “raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it” — talent “who are the core” of legacy media companies’ success and “long term economic prosperity.”
Mitchell Schwenz, a spokesman for the Directors Guild of America, said the group intends to outline its concerns about the deal to Netflix. “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,” he said.
Cat Zakrzewski contributed to this report.
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