Netflix has decided to pay Warner Bros. Discovery’s streaming and studio division entirely in cash, outbidding Paramount in a move that could reshape the global entertainment landscape. The announcement came alongside Netflix’s fourth-quarter earnings, revealing a $72 billion US equity value deal at $27.75 US per share. This move accelerates the process for a WBD shareholder vote and provides certainty of the value at closing, as stated in a letter to investors.
The competition between Netflix and Paramount has been ongoing, with Netflix targeting WBD’s studio business and streaming library while Paramount sought to acquire the entire company, including assets like CNN and Discovery+. Bloomberg Intelligence’s senior media analyst, Geetha Ranganathan, questioned the necessity of the deal for Netflix, emphasizing its significance for Paramount Skydance under new CEO David Ellison. Despite concerns over Netflix’s slowing subscriber growth, the acquisition of Warner Bros.’ extensive content catalog is anticipated to significantly enhance Netflix’s business.
The journey to this point began in October 2025 when WBD signaled its intent to explore a sale after announcing its split into two companies. Paramount’s initial bid was rejected, while reports emerged of Netflix considering a bid for Warner Bros. By November 2025, Netflix pledged to continue releasing Warner Bros. films in theaters, aligning with industry standards to secure the deal. In December 2025, Paramount increased its proposed breakup fee, but ultimately Netflix secured the acquisition of Warner Bros. for $72 billion in cash and stock.
Despite facing backlash from U.S. Congress members and Hollywood unions, WBD rejected Paramount’s hostile bid in January 2026, urging investors to support the Netflix deal instead. Analysts like Ranganathan believe that Netflix’s brand strength and stewardship make it a preferred partner for Warner Bros. Paramount’s aggressive pursuit led to legal action against WBD, further intensifying the competition.
Looking ahead, the all-cash offer from Netflix is expected to expedite the shareholder vote, potentially posing challenges related to antitrust considerations and strategic business decisions for Netflix in managing Warner Bros. and HBO assets. Uncertainties around the deal’s regulatory approval and future implications are causing fluctuations in market sentiment surrounding Netflix.