Hollywood’s biggest power grab in years hasn’t even closed yet, and it’s already detonated a political, labor, and antitrust fight.
On December 5, Netflix announced a $72 billion cash-and-stock agreement to acquire Warner Bros. Discovery’s studio and streaming business — including Warner Bros., HBO/HBO Max, DC, and a century of film and TV IP — valuing the assets at $27.75 per share and about $82.7 billion in enterprise value.
The deal would merge the world’s largest paid streaming platform with one of Hollywood’s most storied studios, but it’s very much not done. It still needs shareholder and regulatory approval and is now facing a fresh challenge: a hostile counterbid from Paramount Skydance.
How Netflix Won the First Round — and Why the War Isn’t Over
Netflix’s offer followed a fast, messy auction. Warner Bros. Discovery (WBD) put its studio and streaming arm on the block after deciding to spin off its legacy cable channels — CNN, TNT, Discovery, HGTV and others — into a separate company called Discovery Global.
Comcast and Paramount Skydance also bid. Netflix’s winning proposal:
- Values WBD at $27.75 a share
- Pays $23.25 in cash + $4.50 in Netflix stock per WBD share
- Applies only to the studios and streaming division, leaving the cable networks to be spun off into Discovery Global
Warner’s board liked the structure: shareholders get a pile of cash and end up owning stock in both Netflix and the new cable spinoff.
Paramount Skydance, however, wasn’t done. On December 8, it launched a hostile all-cash tender offer at $30 per share, valuing all of WBD — studios, streaming, and cable — at roughly $108.4 billion, and pitching its bid directly to shareholders.
Paramount has blasted the process as “myopic” and argues that its richer, all-cash deal is better and faster, while Netflix says its structure is “pro-consumer” and more realistic on antitrust. For now, WBD’s board still backs the Netflix agreement, but the battlefield has clearly reopened.
The Monopoly Question: A 430M-Subscriber Superstreamer
If regulators bless the Netflix deal, it would create a streaming juggernaut with unprecedented reach.
- Netflix already has 300M-plus paid memberships worldwide.
- Warner’s Max/HBO Max and Discovery+ services add roughly 130M streaming subscribers.
That means the combined entity would sit on well over 430M subscriptions globally — before you even count free trials or password-sharing hangovers.
Netflix gets instant control of:
- Warner’s film vault (Harry Potter, DC, classic WB titles)
- TV staples like Friends and Game of Thrones
- HBO’s prestige brand, which Netflix says will keep operating as a stand-alone label in the near term
On paper, it’s the ultimate library power-up. In practice, it’s exactly the kind of consolidation that makes regulators, unions, and rivals see flashing red lights.
Wall Street’s $59B Bet — and Netflix’s Cost-Cutting Math
To get this done, Netflix is loading up on one of the biggest acquisition loans ever.
Wall Street banks have arranged a $59 billion unsecured bridge facility, led by Wells Fargo, BNP Paribas, and HSBC. Wells Fargo alone is on the hook for $29.5 billion, the largest single commitment ever for an investment-grade bridge loan.
Netflix plans to refinance that bridge with longer-term debt and says it’s targeting $2–3 billion in cost savings by year three after closing.
Investors are divided:
- Some see the deal as the logical way for Netflix to deepen its moat with more IP and a bigger subscription funnel.
- Others worry it’s a very expensive admission that organic growth is getting harder — and that taking on this much debt into a cyclical ad and content business is risky.
There’s also a massive $5.8B breakup fee if the deal collapses, and a separate fee owed to Netflix if Warner walks away for another bidder — a big financial penalty hanging over any detour to Paramount or Comcast.
Theaters vs. the Streaming Steamroller
Inside Hollywood, the loudest alarm bells aren’t coming from rival streamers — they’re coming from movie theaters.
Cinema United, which represents tens of thousands of movie screens, called the proposed Netflix–Warner tie-up an “unprecedented threat to the global exhibition business.” The trade group warns that if Warner titles stop getting robust theatrical runs and go mostly to streaming, the merger could wipe out around 25% of the annual domestic box office.
Netflix has historically given only a few of its films short, “token” theatrical windows. Most titles go straight to the app.
A group of feature film producers, in an anonymous letter to Congress, put it more bluntly:
Netflix sees any time spent watching a movie in a theater as time not spent on its platform — and has every incentive to crush theatrical.
Ted Sarandos insists that’s not the plan. Netflix has pledged to maintain Warner’s theatrical releases, saying it will keep movies in cinemas but push for “much more consumer-friendly” windows that move films to streaming faster. Contracts with theater chains reportedly lock in much of Warner’s cinema strategy through 2029, which limits immediate changes even if the deal closes.
Still, theater owners hear the subtext: shorter windows, more streaming, more leverage for Netflix in release negotiations. That’s why they’re treating this like an existential fight.
Labor, Politics, and the Antitrust Crosshairs
The merger isn’t just a Wall Street story; it’s now a full-blown political and labor flashpoint.
The Writers Guild of America has come out swinging, saying the world’s largest streamer swallowing one of its biggest competitors is exactly “what antitrust laws were designed to prevent.” In a formal statement, the guild warned that the deal would kill jobs, push down wages, worsen working conditions, raise prices for consumers, and shrink the volume and diversity of content available to viewers.
Other unions and guilds — including the Directors Guild of America and SAG-AFTRA — have raised similar concerns about consolidation, bargaining power, and creative freedom, even if not all have formally called for the deal to be blocked.
On the political side:
- Lawmakers like Sen. Elizabeth Warren and Rep. Pramila Jayapal have slammed the merger as a potential monopoly that could hike prices and reduce consumer choice.
- President Donald Trump has said the deal “could be a problem” because of market share, and has promised to be involved in the review, though he later admitted he hadn’t fully read the details.
Regulators in the US and abroad now have to decide what market Netflix and Warner actually operate in:
Is this streaming vs. streaming? All filmed entertainment? Some blend of both?
How they draw that box will determine whether this is a terrifying monopoly or just another round of consolidation in an already concentrated industry.
What Happens If the Deal Actually Closes?
If Netflix does ultimately win — beating both the regulators and Paramount’s hostile push — the industry map changes fast:
- A combined base of 400M+ streaming subscriptions under one umbrella
- A single company controlling Stranger Things, Squid Game, Game of Thrones, Harry Potter, DC, and a huge chunk of classic Hollywood cinema
- A much tougher negotiating partner for talent, unions, theater chains, and even hardware and distribution partners
The combined company is projecting 1.2 million additional home transactions a year and more than $1 billion in extra annual revenue, largely driven by cross-selling, bundling, and new exploitation of Warner’s library.
But between now and the expected closing window — late 2026 at best — there are a lot of ways this could go sideways: antitrust lawsuits, CFIUS scrutiny, shifting political winds, or a shareholder revolt triggered by Paramount’s all-cash offer.
For Hollywood workers, theaters, and rival studios, Netflix’s Warner play isn’t just another M&A headline. It’s the moment where the streaming era’s biggest winner tries to lock in its status as the final boss of filmed entertainment — and everyone else has to decide whether to fight the level or hit “continue” and hope they survive inside it.