Netflix’s stunning agreement to acquire Warner Bros. and HBO, valued at roughly $72 billion, has sent shock waves through Hollywood, signaling what could become one of the most consequential studio shake-ups since the rise of streaming. The transaction, announced Friday, would merge two of the most influential forces in global entertainment and bring under one roof a vast library that includes Batman, Harry Potter, Game of Thrones, and decades of Warner Bros. theatrical releases. If approved, the acquisition would also give Netflix direct control of the studio that led the domestic box office in 2024, marking a pivotal moment for a company long defined by its resistance to traditional media operations.
The merger is contingent on Warner Bros. Discovery splitting into two publicly traded companies by the summer of 2026. Netflix will seek to acquire the half containing Warner’s film and television assets after this separation, while Discovery Global will become independent. Once the separation is complete, U.S. and international regulators will begin a formal review process to determine whether the union of two of the world’s largest streamers threatens competition. This regulatory process is expected to begin in mid-2026 and could take many months.
The announcement unsettled investors and rivals. Warner Bros. Discovery’s stock rose about 2% after the news, while Netflix fell over 2%. Paramount and Comcast, both bidders, were reportedly surprised. Industry experts foresee more lobbying from both as regulators weigh the merger’s impact. Variety and Financial Times noted that European regulators have already raised concerns about increased media concentration.
Netflix co-CEO Ted Sarandos told analysts Friday, “Some of you are surprised that we’re making this acquisition.” He added, “Over the years, we have been known to be builders, not buyers.” Sarandos called it “a rare opportunity” that fits Netflix’s goal “to entertain the world and to bring people together through great stories.” Addressing earlier remarks about failed media mergers, he said past deals fell apart because “buyers didn’t understand the entertainment business,” adding, “We understand these assets that we’re buying.”
While Netflix framed the merger as broadening choices, critics warned of fewer theatrical opportunities and diminished competition. Cinema United called it an unprecedented threat to global exhibition, citing Netflix’s preference for streaming. CEO Michael O’Leary urged regulators to assess potential impacts on theaters. Netflix repeated its intention to maintain Warner Bros.’ operations, including theatrical releases—a key concern for cinema operators.
The antitrust outlook remains uncertain. Netflix agreed to the same substantial breakup fee offered by Paramount, ensuring Warner Bros. Discovery receives billions if the deal collapses — a sign of how contentious global reviews may become. Sen. Mike Lee said the proposal “should send alarm to antitrust enforcers around the world,” echoing concerns that a merger combining two streaming titans would reduce choice and bargaining power for viewers and creators. Analysts at The Wall Street Journal reported that Paramount had been viewed as the Trump administration’s preferred buyer, raising political questions about how Washington regulators may now approach the transaction.
Netflix’s leadership argued Friday that the assets are “complementary,” not overlapping, insisting that the merger enhances—not limits—audience options. Co-CEO Greg Peters said Warner Bros. “has helped define entertainment for more than a century,” and suggested Netflix’s “global reach and proven business model” would introduce those worlds to a broader audience while “strengthening the entire entertainment industry.”
Yet many in Hollywood remain unconvinced. A Bank of America research note captured the industry’s mood, concluding that “if Netflix acquires Warner Bros., the streaming wars are effectively over.” A merger of Netflix and HBO — once the fiercest rivals in prestige television — would consolidate power in unprecedented ways, potentially rewriting how the industry finances, distributes, and measures its most valuable content.
The next steps will unfold over a multi-year timeline. After Warner Bros. Discovery’s separation in the summer of 2026, regulatory agencies, labor unions, and political stakeholders across various jurisdictions are expected to conduct lengthy reviews before Netflix can finalize the acquisition. The approval process is likely to extend into 2027 or beyond, meaning the entertainment landscape will gradually evolve over several years as the deal’s outcome becomes clearer.
