Netflix Buying Warner Bros, Explained: What’s in the Deal, Why It’s So Complicated, and Why Critics Are Pushing Back

Netflix’s move to acquire Warner Bros has quickly become one of the most disruptive Hollywood deals in decades, not just because of the price tag, but because of how the transaction is structured and who is lining up to stop it.

At the center of the plan is a simple goal: Netflix wants to pair its global streaming scale with Warner Bros’ film and TV pipeline, plus the HBO brand and library. But the path to get there runs through a corporate separation, a rival bidder trying to derail the deal, and regulators who are already signaling deeper scrutiny.

What exactly is Netflix buying?

Despite the shorthand “Netflix buys Warner Bros,” the target is not the entire Warner Bros. Discovery empire as it exists today.

Under the definitive agreement announced December 5, 2025, Netflix would acquire Warner Bros, including its film and television studios, plus HBO and HBO Max. The deal value was framed at $27.75 per Warner Bros. Discovery (WBD) share and an enterprise value of about $82.7 billion. 

What Netflix is not buying is just as important. WBD’s Global Networks division is slated to be separated into a new publicly traded company called Discovery Global before the Netflix transaction closes. 

Industry reporting and trade groups have described that “Global Networks” bucket as including major linear TV assets like CNN and TNT Sports, plus Discovery’s network portfolio, and related digital products such as Discovery+ (which would sit outside the Netflix-owned Warner assets under the current structure). 

The timeline: why the deal feels like it’s always “pending”

Netflix and WBD have said the acquisition is expected to close after the Discovery Global separation, which is currently expected to be completed in Q3 2026. They’ve described the overall closing window as roughly 12 to 18 months, assuming approvals land. 

That long runway matters because the deal is happening during a volatile period for streaming economics, theatrical recovery, and media regulation. The longer the time between signing and closing, the more chances there are for something to break: financing costs, audience shifts, political pressure, or regulatory intervention.

Why Netflix changed the deal terms in January 2026

On January 20, 2026, Netflix and WBD amended their agreement to shift to an all-cash transaction, while keeping the headline $27.75 per share value unchanged. Netflix said the revised structure increases certainty for WBD shareholders and speeds up the path to a shareholder vote. 

The change also removed a major complaint about the earlier structure. The original agreement included a cash-plus-stock mix ($23.25 in cash plus $4.50 in Netflix stock), and that stock component came with a collar mechanism. As Netflix’s share price fell below the collar’s floor level, rivals argued the offer had become less predictable for shareholders. 

Netflix has said it expects the revised structure will allow WBD shareholders to vote by April 2026. 

The part that confuses everyone: WBD vs Warner Bros vs Discovery Global

One reason this story is hard to follow is the naming and sequencing.

• Warner Bros. Discovery (WBD) is the current public company.
• Discovery Global is the planned spinoff that would hold WBD’s Global Networks business after separation. 
• Warner Bros (the “remaining” company after separation) is what Netflix is trying to buy, meaning studios and HBO/HBO Max, once the networks are spun out. 

For shareholders, the value is not just the cash Netflix pays. The Netflix press release explicitly notes that WBD stockholders are also expected to receive “the additional value” of shares in Discovery Global after it is separated. 

That two-part payoff is a key battleground in the current takeover war.

Rival bidder: Paramount’s campaign to stop the Netflix deal

Paramount Skydance has been trying to replace the Netflix transaction with its own $30-per-share all-cash offer for all of WBD. It has taken the fight directly to shareholders, describing Netflix’s agreement as inferior and raising alarms about the Global Networks separation. 

Paramount has also laid out a governance strategy: nominating directors for the 2026 WBD annual meeting and soliciting votes against the Netflix transaction. It has even said it would seek a bylaw change requiring shareholder approval for any separation of Global Networks. 

WBD’s board has repeatedly rejected Paramount’s approach, arguing Netflix provides superior value and certainty. In a shareholder letter, WBD’s board also warned that pivoting away from Netflix would trigger major costs, including a $2.8 billion termination fee plus other financing-related costs it estimated at roughly $4.7 billion in total. 

Complexity #1: The spinoff and the “what is Discovery Global worth?” debate

Paramount’s pitch leans heavily on the idea that the Discovery Global spinoff is not worth much, at one point describing the cable spinoff as “effectively worthless,” according to Reuters reporting. 

WBD counters that Discovery Global value is real and should be included when comparing offers. Reuters reported that WBD advisers used multiple approaches and arrived at a valuation range that, in one scenario, was as low as $1.33 per share and as high as $6.86 per share depending on assumptions (including potential deal involvement). 

This is a major reason the shareholder decision is tricky: it’s not simply “$27.75 vs $30.” It’s “cash now, plus whatever Discovery Global becomes” vs “cash now, no spinoff stake, but potentially a different corporate outcome.”

Complexity #2: Debt allocation and moving parts inside the proxy

Another layer is the debt split between the businesses.

The preliminary proxy statement outlines a mechanism where the company targets a specific amount of net debt assigned to Discovery Global around the time of the distribution (with a specified amount referenced around mid-2026), and it describes how shifting debt allocation can adjust the per-share merger consideration. 

In plain English: if more debt stays with the business Netflix is buying, the cash Netflix pays can be adjusted downward, but shareholders may still be “made whole” because Discovery Global would be less burdened and therefore potentially more valuable. That is normal in heavily structured separations, but it also means investors have to evaluate the deal as a package, not a single number.

Complexity #3: Financing and investor skepticism

Netflix is trying to fund one of the largest entertainment acquisitions ever while keeping Wall Street onside.

Reuters reported Netflix paused buybacks and has described acquisition-related costs, and it detailed major financing commitments, including bridge loan arrangements that grew when Netflix moved to all-cash. 

Market reaction has been cautious. Barron’s reported investor concerns about the cost of the deal, its impact on margins, and the uncertainty created by the ongoing bidding war. 

Objection #1: Antitrust regulators are already digging in

This deal is almost guaranteed to face intense competition scrutiny because it would combine the largest streaming platform with a major studio and a premium TV brand.

The WBD proxy lists regulatory clearance requirements, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act (HSR) and other approvals or waiting periods. 

And regulators appear to be moving beyond a quick review. TheWrap reported the U.S. Department of Justice issued “second requests” for information in mid-January, extending the review timeline and indicating a deeper investigation. 

In Europe, Reuters reported the EU’s merger watchdog is expected to scrutinize the Netflix bid and Paramount’s rival effort on a parallel timeline, an unusual scenario that could influence which bidder (if any) ultimately wins. 

Objection #2: Writers and labor groups say the merger should be blocked

Hollywood unions and guilds have been among the loudest critics.

The Writers Guild of America (WGA) issued a statement arguing the merger would reduce jobs, suppress wages, raise prices for consumers, and reduce the diversity of content, adding plainly: “This merger must be blocked.” 

Fortune reported that the Producers Guild of America voiced concern, the Directors Guild raised worries about future pay, and SAG-AFTRA said the transaction raises “serious questions” about its impact on creative workers. 

The underlying fear is familiar in media consolidation: when fewer companies control more of the pipeline, creatives often worry they will have less leverage, fewer buyers for projects, and more pressure on compensation terms.

Objection #3: Movie theaters fear Netflix will shrink the theatrical market

Cinema trade groups are also pushing back hard, largely because Netflix’s historical model has prioritized streaming-first releases and shorter theatrical windows.

Boxoffice Pro reported that Cinema United opposed the deal, warning it could pull a significant portion of annual domestic box office away from theaters, and European cinema group UNIC echoed similar concerns about fewer films and potential job losses. 

Netflix and WBD have said Netflix intends to maintain Warner Bros’ current operations and continue theatrical releases, but exhibitors remain skeptical and want regulators to look closely at how release windows and marketing commitments would work in practice. 

Objection #4: Consumers might get “one app” convenience, or less competition

One argument in favor of the merger is that it could reduce “subscription fatigue” by bringing HBO Max content under Netflix’s umbrella. Reuters recently described consumer frustration with juggling multiple subscriptions and rising costs. 

But critics argue convenience can come at a price: fewer major competitors can mean higher subscription fees over time, fewer places for creators to sell work, and less pressure to keep quality high. Reuters noted those concerns are part of the broader debate around the deal. 

What happens next: the milestones to watch

Here are the practical checkpoints that will determine whether this deal actually closes:

1. WBD shareholder vote (targeted by April 2026)
2. Netflix has said the revised structure should enable a vote by April. 
3. Regulatory review in the U.S., EU, and likely the UK
4. The deal is subject to HSR and other approvals, and DOJ second requests suggest a longer process. 
5. The Discovery Global separation (currently expected Q3 2026)
6. The acquisition is designed to close after the spinoff. 
7. The Paramount pressure campaign and legal maneuvering
8. Paramount has promised to fight at the ballot box and in court, while WBD insists Netflix remains the better deal.