Netflix recently made its $72B US bid for Warner Bros. Here’s how the deal came about

Netflix will pay Warner Bros. Discovery streaming and the studio in full money to eliminate its rival Paramount – the latest chapter in a saga that lasts for months, when concluded, could significantly change the global entertainment industry.

The giant announced the move on the same day as its fourth quarter earnings. The US $72-billion deal, which works out to $27.75 US per share, “accelerates the timeline for the WBD shareholder vote and provides greater certainty of value to be delivered at closing,” Netflix wrote in a letter to investors on Tuesday.

Netflix and Paramount have been arguing over the deal for months. While Netflix is ​​vying for the company’s studio business and streaming catalog, Paramount wants to acquire the entire company — which would include the likes of CNN and streaming channel Discovery+.

Geetha Ranganathan, senior news analyst at Bloomberg Intelligence, questioned whether the deal was a “must have” or a “nice to have” for Netflix.

The deal appears to be more important for Paramount Skydance under the leadership of new CEO David Ellison, and less so for Netflix, Ranganathan said. However, Netflix’s subscriber growth has slowed, worrying investors, and it now relies on engagement to boost its value.

To that end, Warner Bros.’ in-depth catalog – featuring major franchises such as Harry Potterthe TV plays like this Friends, The Sopranos again Game of Thronesand old movies like that Citizen Kane again Casablanca — will help Netflix grow its business “dramatically,” Ranganathan said.

So how did we get here, and what happened next?

October 2025: WBD says it is testing sales

Months after Warner Bros. Discovery has announced that it will eventually split into two companies, Warner Bros. which owns the studio and film/TV library as well as Discovery Global properties such as CNN and Discovery+, the company indicated during the month that it is exploring a possible sale of the business.

Paramount’s initial bid to buy the entire company for around $24 US a share has reportedly been rejected.

Around the same time, Netflix missed its third-quarter targets due to a dispute with Brazilian tax authorities. Investors remain concerned about the streaming giant’s ability to sustain long-term growth.

During that earnings call, Netflix CEO Ted Sarandos — who has long insisted the broadcaster is a builder, not a buyer — said the company would be open to “exclusive” mergers and acquisitions, but was not interested in buying dying media networks.

At the end of the month, reports surfaced that Netflix was evaluating a bid for Warner Bros., the streaming division and studio WBD.

Nov. 2025: Netflix vows to release WB movies in theaters

Netflix then tried to sweeten its bid for Warner Bros. by promising that the company would continue to release the studio’s films in theaters, according to Bloomberg News.

Netflix, because of its business model, has long maintained that people would rather watch movies at home than in a theater. But theater windows have had to be allowed in recent years to appease filmmakers and qualify them for Oscars.

December 2025: Netflix’s $72B deal and Paramount’s aggressive bid

Paramount is increasing its proposed breakup fee (the penalty it pays to WBD in the event the deal doesn’t go through) from US$2.1 billion to US$5 billion.

A few days later, WBD announced that Netflix would acquire Warner Bros. with $72 billion in cash and stock after its split from Discovery Global. US President Donald Trump, who is friendly with the Ellison family, says he will be involved in the revision of the agreement.

Members of the US Congress and Hollywood unions are criticizing the deal. Some politicians call it a “nightmare” for America’s antitrust regulators, and unions say it will lead to job cuts, fewer theatrical releases, and consolidation of power in the entertainment industry.

Now that it has been rejected multiple times, Paramount is launching an aggressive bid of $108.4 billion against the wishes of WBD’s board of directors and its CEO David Zaslav.

Its bid is reportedly backed by several Middle Eastern investment funds, and temporarily by Trump’s son-in-law, Jared Kushner. Billionaire Larry Ellison (whose son, David, is CEO of Paramount) made a personal guarantee to sponsor the offering.

January 2026: WBD rejects Paramount, supports Netflix

In the new year WBD rejected Paramount’s predatory bid and called on investors to do the same, describing it as a risky offering on mortgages.

Instead, the company is encouraging shareholders to vote on the Netflix deal. The two companies have created a marketing campaign that highlights the benefits of their partnership.

“The amount of debt that Paramount will have to take on to support this project will be huge,” said Ranganathan, an analyst, on the big risk if the deal goes south.

“I think so [WBD] just think that the bigger the Netflix brand, the better. Netflix will be a better steward of their assets, of all their brands, across all properties,” he added.

Last week, Paramount stepped up its aggressive pursuit of WBD, suing the company over details of its deal with Netflix and announcing plans to appoint directors to WBD’s board.

What happens next?

With Netflix now giving us all the money, a shareholder vote will come soon, Ranganathan said, “which will be Paramount’s deadline.”

“Nevertheless [U.S.] regulators approve it, we don’t know what will happen after that,” said the analyst. For example, Netflix may find itself facing an antitrust conundrum where it is forced to choose between the Warner Bros. film studio and HBO, he said.

“Are they actually going to keep the movie business? Are they going to keep HBO? There are a lot of ifs and buts here, which I think weighs on the stock and the sentiment a little bit.”