In a move set to redefine the global entertainment landscape, Netflix has agreed to acquire Warner Bros Discovery’s film studio and streaming businesses – including HBO Max – for $72 billion (£54 billion).
The cash-and-stock transaction, valuing the enterprise at $82.7 billion including debt, marks the most significant media merger in over a decade and dramatically accelerates Netflix’s evolution from streaming platform to full-fledged entertainment titan.
A new entertainment powerhouse
The deal hands Netflix control of some of the most iconic properties in entertainment history: the Harry Potter and DC Comics film franchises, HBO’s award-winning series like Game of Thrones, Succession, and The Last of Us, and legacy television gems such as Friends and Looney Tunes. It also includes TNT Sports International, expanding Netflix’s live sports footprint beyond the US.
“This is a rare opportunity to set Netflix up for success for decades to come,” said co-CEO Ted Sarandos, who described Warner Bros. as the studio that “defined the last century of entertainment” and pledged that the combined entity would “define the next one.”
Netflix estimates $2-3 billion in annual cost savings through operational synergies, primarily by streamlining overlapping technology and support functions. Crucially, the company confirmed Warner Bros. films will continue to receive theatrical releases—a notable concession to cinema operators and fans of the big-screen experience.
Regulatory hurdles and industry backlash
Despite enthusiasm from executives, the deal faces steep challenges. It requires approval from antitrust authorities in both the US and Europe, with critics warning of reduced competition, fewer jobs, and higher subscription prices.
The Writers Guild of America issued a joint statement from its East and West branches calling for the merger to be blocked, arguing it would “eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content.”
Cinema United CEO Michael O’Leary echoed these concerns, calling the acquisition an “unprecedented threat” to independent and major cinema chains worldwide.
Strategic uncertainty for consumers
Netflix remains vague on how HBO Max will be integrated. Co-CEO Greg Peters acknowledged HBO’s “powerful” brand but declined to specify whether it would operate as a standalone tier, be folded into Netflix, or relaunched as a premium add-on. Analysts suggest HBO’s survival in some form is likely, given its prestige cachet.
The merger would combine Netflix’s 300+ million global subscribers with HBO’s estimated 128 million, creating a behemoth with unmatched scale. Yet this dominance raises questions: Will consumers pay more for consolidated content – or benefit from a “one-stop shop” that replaces multiple subscriptions?
Political wild cards
Adding complexity, the deal enters a politically charged environment. Former President Donald Trump – still influential in media policy – has publicly favoured rival bidder Paramount Skydance, backed by Oracle co-founder Larry Ellison, a major Republican donor. A senior Trump administration source told CNBC the bid is viewed with “heavy scepticism,” raising the prospect of heightened scrutiny if Trump returns to office.
Warner Bros. Discovery CEO David Zaslav framed the sale as a strategic evolution, allowing the company to spin off its non-core assets – including CNN, Discovery Channel, and Eurosport – into a new entity called Discovery Global. The streaming and studio division, now bound for Netflix, will retain TNT Sports International.
What’s next?
The transaction is expected to close in 12 to 18 months, pending regulatory clearance and the completion of Warner Bros.’ corporate split. Netflix has agreed to pay a $5.8 billion breakup fee if the deal collapses.
Media analyst Paolo Pescatore of PP Foresight called the move “a huge statement of intent” but cautioned that integrating such vast operations could prove challenging. “This isn’t just a merger – it’s a cultural collision between Hollywood’s legacy and Silicon Valley’s disruption.”
As one industry insider put it: “The script has been written, but the final cut is still in the regulators’ hands.”
Source: BBC