Netflix courts Warner Bros. for $83 billion in a deal that redraws Hollywood and raises eyebrows

Netflix has agreed to buy Warner Bros. Discovery’s film and TV studios, along with its streaming business, in a deal worth $82.7 billion, including debt. The transaction, announced Friday, will make Netflix the largest entertainment company in the world once it closes in 2026.

Warner Bros. will first spin off its cable networks, including CNN, TNT, and Discovery, into a separate company. Netflix will take over the studio operations, HBO, and streaming arm once that split is complete.

The deal followed a competitive bidding process involving Comcast and Paramount. Netflix’s offer, composed largely of cash, won after months of talks. Co-CEO Ted Sarandos said the acquisition would “help us keep innovating and investing in stories that matter most to audiences.”

If approved, the merger gives Netflix control of Warner Bros.’ and HBO’s premium shows.

Why now

Netflix has long described itself as a builder, not a buyer. Its biggest acquisition before this was the $8.5 billion purchase of MGM by Amazon back in 2022. This new deal, worth nearly ten times as much, signals how the company is thinking differently about growth.

The move comes as Netflix tries to secure the kind of long-term intellectual property that keeps audiences subscribed: a strategic shift from depending on temporary hits like Squid Game or Stranger Things.

It also coincides with a more aggressive global monetisation strategy. Since mid-2024, Netflix has quietly raised subscription prices across several regions—from Nigeria to the U.S., U.K., and Australia. The company cited rising production costs, currency volatility, and inflation.

In Nigeria alone, subscriptions have climbed three times since 2024. In the U.K., the Standard plan jumped 18% this year. Across North America, it’s the third price adjustment in under two years. Each hike aligns with Netflix’s push to increase average revenue per user, even if it means testing price sensitivity in emerging markets.

That pattern shows Netflix is tightening margins globally, and the Warner Bros. deal fits that playbook. By owning a massive content engine outright, Netflix can spend smarter on franchises rather than licensing them at premium rates.

What this deal means for the industry 

If approved, the merger would eclipse every prior Hollywood deal since Disney bought 21st Century Fox. It could also push smaller studios and streaming services into new mergers just to stay alive.

Netflix’s ownership of both distribution and content raises antitrust questions. Netflix’s ownership of both distribution and content raises antitrust questions. Analysts say regulators will likely test whether that control amounts to vertical dominance—the same concern raised during Disney’s Fox takeover, only this time with a tech company that already shapes global viewing habits through algorithms, not theatres. Regulators in the U.S. and Europe have already flagged the deal for review. Film producers and theatre owners warn it could weaken traditional movie releases.

A group of anonymous producers even told Congress they fear “monopolistic control” and worry Netflix “has no incentive to support theatrical exhibition.” Netflix has promised to keep Warner Bros.’ movie releases in cinemas for now—a nod to regulators and creatives wary of streaming dominance.

Yet this is also where Netflix sees its biggest prize. Beyond the HBO catalogue and Warner’s studios lies DC Studios, home to some of Hollywood’s Superman, Batman, and the most underused franchise in Hollywood. Under James Gunn and Peter Safran, DC has been rebuilding with new Superman and Supergirl films, The Batman sequel, and spin-offs like The Penguin. 

“There’s no storytelling content that provides a bigger palette than DC,” Warner Bros. Discovery CEO David Zaslav told Bloomberg Businessweek. Analysts call it the crown jewel of the deal, a universe Netflix can finally own instead of license. It’s the kind of creative windfall that could secure Netflix’s next decade—if regulators let it.

What it means for viewers

The merger could make Netflix the first platform where old Hollywood meets new tech in one ecosystem. Subscribers could see Game of Thrones next to Stranger Things, or Friends streaming alongside The Crown.

Yet it also signals higher expectations for subscribers. Owning more IP means carrying more costs, and those tend to show up on monthly bills. With price hikes already spreading worldwide, Netflix appears ready to trade scale for profit: fewer users, but each paying more.

The company that started by mailing DVDs is now betting $83 billion that the future of entertainment belongs to whoever owns the stories, not just who streams them.