Netflix has decided to pay for Warner Bros. Discovery’s streaming and studio division exclusively in cash to outpace Paramount in a lengthy battle that could potentially reshape the global entertainment landscape. The announcement of this strategic move came on the same day as Netflix’s fourth-quarter earnings report. The deal, valued at $72 billion US in equity, equates to $27.75 US per share, accelerating the timeline for a WBD shareholder vote and ensuring the certainty of value at closing, as per a letter to investors released by Netflix.
The ongoing competition between Netflix and Paramount revolves around the acquisition of Warner Bros. Discovery, with Netflix targeting the studio business and streaming library, while Paramount aims to purchase the entire company, including assets like CNN and the Discovery+ streaming platform. Geetha Ranganathan, a senior media analyst at Bloomberg Intelligence, has questioned the necessity of this deal for Netflix, suggesting it may be more crucial for Paramount Skydance under new CEO David Ellison. Despite this, Netflix’s growth in subscribers has slowed, prompting concerns among investors, with the company now focusing on enhancing engagement to drive its value.
The extensive content library of Warner Bros., featuring iconic franchises such as Harry Potter, popular TV series like Friends and Game of Thrones, along with classic films like Citizen Kane and Casablanca, is seen as a significant boost for Netflix to expand its business substantially, according to Ranganathan.
The timeline leading up to this point began in October 2025 when Warner Bros. Discovery first hinted at a potential sale following its decision to split into two separate entities. Paramount’s initial bid to purchase the entire company was reportedly turned down, coinciding with Netflix facing challenges in meeting financial targets due to a tax dispute. Netflix’s CEO expressed openness to selective mergers and acquisitions during an earnings call, leading to reports of Netflix exploring a bid for Warner Bros.’ streaming and studio division.
In November 2025, Netflix sought to strengthen its bid by committing to continue releasing Warner Bros. films in theaters, a departure from its traditional streaming-centric approach. The month of December saw Paramount increasing its breakup fee and subsequently being outbid by Netflix. However, Paramount persisted with a hostile bid backed by external investors, triggering concerns from various stakeholders about potential antitrust issues and industry consolidation.
As of January 2026, Warner Bros. Discovery rejected Paramount’s hostile bid, emphasizing the risks associated with the offer, and endorsed the deal with Netflix, urging shareholders to support it. The situation escalated as Paramount pursued legal action against Warner Bros. Discovery and contested the terms of the Netflix agreement, indicating a contentious battle for control.
Looking ahead, with Netflix offering an all-cash deal, a shareholder vote on the agreement looms closer, which could serve as a decisive moment for Paramount. Uncertainties remain regarding regulatory approvals and the future landscape of the film business and HBO under Netflix’s ownership, suggesting potential challenges and complexities ahead.