Netflix is preparing to restructure its $82.7 billion bid for Warner Bros Discovery, with discussions underway about converting the cash-and-stock offer to an all-cash transaction. The potential pivot, first reported earlier this week, represents an effort to speed a transformational deal that has attracted both political scrutiny and a hostile competing bid.

The move comes as Netflix faces pressure from multiple directions: Paramount Skydance has mounted a $108 billion hostile counteroffer, while lawmakers on both sides of the aisle have raised antitrust concerns about media consolidation. An all-cash structure could simplify the transaction and potentially expedite regulatory review.

Understanding the Current Deal

Netflix announced its agreement to acquire Warner Bros on December 5, 2025, in a deal that would reshape the entertainment industry:

  • Total enterprise value: $82.7 billion, including debt assumption
  • Equity value: $72.0 billion
  • Original terms: $23.25 per share in cash plus $4.50 per share in Netflix stock
  • Expected closing: Third quarter of 2026, pending regulatory approvals

The deal would give Netflix control of Warner Bros' storied film and television studios, the HBO and HBO Max streaming platforms, and a vast content library including franchises like Harry Potter, DC Comics, and Game of Thrones.

Why Go All-Cash?

Several strategic considerations may be driving Netflix toward an all-cash structure:

Speed advantage: Stock deals typically require additional regulatory filings and can face delays if share prices fluctuate significantly. An all-cash offer simplifies the transaction mechanics.

Shareholder clarity: Warner Bros Discovery shareholders would receive definite value rather than Netflix shares whose price could change before closing.

Competitive positioning: The all-cash structure could make Netflix's bid more attractive relative to Paramount Skydance's counteroffer, which includes significant stock consideration.

"In a contested M&A situation, certainty of value matters. An all-cash bid removes one source of risk for target shareholders and could help Netflix lock up commitments."

— M&A advisor at a major investment bank

The Paramount Skydance Challenge

Netflix's deal has faced an aggressive challenge from Paramount Skydance, the entity formed from the merger of Paramount Global and Skydance Media under David Ellison's leadership:

Hostile bid: Paramount Skydance announced a $108 billion counteroffer for Warner Bros Discovery, topping Netflix's valuation.

Litigation: On January 12, Paramount Skydance filed a lawsuit against Warner Bros Discovery, seeking access to financial details and challenging aspects of the Netflix deal.

Board nominations: Paramount Skydance has announced plans to nominate directors to the WBD board and propose bylaw amendments.

However, a Delaware judge dealt Paramount Skydance a setback on January 15, declining to expedite the lawsuit after ruling the company hadn't demonstrated sufficient irreparable harm.

Theatrical Window Negotiations

An interesting subplot involves theatrical release windows. Netflix has historically premiered most content directly on its streaming platform, but the Warner Bros acquisition raises questions about theatrical strategy:

Initial reports: Netflix might give Warner Bros films a 17-day theatrical window before streaming availability.

Updated commitment: Co-CEO Ted Sarandos recently extended that commitment to 45 days for major releases, a concession to theater owners and filmmakers who value theatrical exclusivity.

The theatrical window issue has significant financial implications, as box office revenue remains an important profit center for Warner Bros' film slate.

Regulatory Landscape

Any deal of this magnitude faces intense regulatory scrutiny:

Antitrust review: The Federal Trade Commission will examine market concentration in streaming and content production. Combined, Netflix and HBO Max would control a dominant share of the premium streaming market.

Political concerns: Lawmakers from both parties have questioned whether such consolidation serves consumers. Senator Amy Klobuchar has called for close scrutiny of the deal.

International regulators: European Union authorities and other international bodies will conduct their own reviews, potentially adding to the timeline.

What It Means for Investors

For shareholders in both companies, the evolving deal creates several considerations:

Netflix investors: An all-cash deal would require significant financing, potentially adding debt to Netflix's balance sheet. However, it would avoid dilution from stock issuance.

WBD shareholders: The bidding war has pushed valuations higher, with both offers representing significant premiums to pre-announcement prices. Shareholders may benefit from waiting to see if either bidder raises their offer.

Streaming sector: The deal's outcome will set precedents for industry structure, potentially triggering additional consolidation among smaller players.

Timeline Ahead

Key dates and milestones to watch:

  • Coming weeks: Netflix expected to finalize revised deal terms
  • Q1 2026: Regulatory filings and antitrust review process begins in earnest
  • Q3 2026: Expected closing date, though contested deals often face delays

The entertainment industry—and investors across the media sector—will be watching closely as Netflix attempts to close the most transformational deal in streaming history.