Netflix jolted the entertainment industry Friday after announcing a sweeping agreement to buy Warner Bros. and HBO, a move that would merge the world's largest streaming platform with one of Hollywood's most storied studios. The deal, valued at roughly $72 billion plus debt-or $82.7 billion in total enterprise value-poses the most significant test yet for U.S. and international regulators confronting consolidation in the entertainment landscape. Netflix said it expects the transaction to close within 12 to 18 months, pending regulatory approval.
Warner Bros. Discovery, the current parent company, confirmed it will proceed with its plan to split into two publicly traded entities in 2026, paving the way for Netflix to acquire the "Streaming & Studios" division that houses Warner Bros., HBO Max and HBO. The company's other half, Discovery Global, will retain cable networks such as CNN. WBD now anticipates the corporate split will take effect in the summer of 2026.
The announcement stunned Hollywood, where Paramount had long been viewed as the likely frontrunner. Executives at Paramount believed they held an advantage given their interest in purchasing the entire WBD portfolio, including cable assets, and their reportedly strong ties to the Trump administration. But Netflix surged ahead this week after submitting two aggressive proposals and agreeing to match the multibillion-dollar breakup fee Paramount offered, according to individuals familiar with the bidding process.
The political and regulatory hurdles remain formidable. Sen. Mike Lee wrote on X that "Netflix's ambition to buy its real competitive threat - WBD's streaming business - should send alarm to antitrust enforcers around the world," adding that the transaction "would raise serious competition questions - perhaps more so than any transaction I've seen in about a decade." Analysts expect months, if not years, of legal examination, particularly as Washington weighs whether the merger creates excessive market power in streaming.
Netflix executives countered that the merger would expand opportunities across the creative sector, arguing the assets complement rather than overlap. Greg Peters, Netflix's co-CEO, said Warner Bros. "has helped define entertainment for more than a century," adding that "with our global reach and proven business model, we can introduce a broader audience to the worlds they create-giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders."
The combined company would unite some of the world's most valuable franchises. Under the agreement, Netflix would gain ownership of Warner Bros.' extensive catalog, including DC Universe characters, the Harry Potter film franchise, Game of Thrones, Friends, Batman, Superman, Wonder Woman and The Big Bang Theory. Ted Sarandos, Netflix's co-CEO, highlighted the appeal of the studio's legacy properties, saying, "Our mission has always been to entertain the world. 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."
Warner Bros. Discovery CEO David Zaslav called the combination a landmark moment for the industry, saying the agreement "combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most."
Still, key industry groups voiced unease. Cinema United, representing theater owners, warned the transaction "poses an unprecedented threat to the global exhibition business," citing Netflix's historic reluctance to support theatrical releases. Anticipating pushback, Netflix said it "expects to maintain Warner Bros.' current operations and build on its strengths, including theatrical releases for films."
Financial markets signaled uncertainty. Netflix shares fell more than 4% in premarket trading following the announcement, while Warner Bros. Discovery stock remained nearly unchanged. The muted response reflected investor caution over integration risks and prolonged regulatory scrutiny.
