Netflix moved to strengthen its grip on Warner Bros. Discovery this week, amending its blockbuster acquisition agreement to an all-cash structure that removes stock-price uncertainty and sets the stage for Hollywood's most transformative deal in decades.

The Revised Deal Terms

Under the amended agreement announced Monday, Netflix will pay $27.75 per share in cash for Warner Bros. Discovery—the same per-share value as the original December deal but now entirely in cash rather than a combination of cash and Netflix stock. The total equity value remains approximately $72 billion.

The shift to all-cash simplifies the transaction structure and provides WBD shareholders with certainty about what they'll receive, regardless of Netflix stock price fluctuations between now and closing. Netflix announced it would pause share repurchases to fund the acquisition, preserving its balance sheet capacity for the massive outlay.

"The revised agreement simplifies the transaction structure and provides greater certainty of value for WBD stockholders."

— Netflix official statement

Fending Off Paramount Skydance

The all-cash amendment appears designed to neutralize a competing hostile offer from Paramount Skydance, which has pursued Warner Bros. Discovery with a $108.4 billion bid that includes a personal guarantee of $40.4 billion in cash from Oracle co-founder Larry Ellison.

Warner Bros. Discovery's board has repeatedly rejected the Paramount Skydance overtures, stating in SEC filings that they consider the offer to be of "insufficient value." By converting to all-cash, Netflix removes any argument that its deal exposes WBD shareholders to Netflix equity risk.

What Netflix Gets

The acquisition would transform Netflix from a streaming-first company into a fully integrated media conglomerate. The deal includes:

  • HBO and HBO Max: Premium content and 80+ million streaming subscribers
  • Warner Bros. Television: Producer of hundreds of shows for broadcast, cable, and streaming
  • Warner Bros. Pictures: Major film studio with DC Comics intellectual property
  • Turner Networks: CNN, TNT, TBS, and other cable properties (though these may be spun off)
  • Massive content library: Decades of films and television series

For Netflix, the prize is clear: HBO's prestige content operation and Warner Bros.' unmatched production capabilities would cement its position as the dominant force in global entertainment.

HBO's Future Under Netflix

Entertainment industry observers have closely watched how Netflix plans to handle HBO, one of television's most storied brands. Netflix co-CEO Greg Peters provided reassurance this week that the company intends to preserve what makes HBO special.

"We're going to keep that HBO team," Peters said. "That HBO team is good at working with talent and giving them the environment that they need to tell those amazing stories."

Netflix has also indicated it would maintain a 45-day theatrical window for Warner Bros. films—a concession to traditional moviemaking that reflects Ted Sarandos's evolving views on theatrical distribution.

Timeline and Regulatory Path

The deal requires Warner Bros. Discovery to first separate its cable business from its streaming and studio operations—a process expected to complete by the third quarter of 2026. The revised transaction structure should enable WBD shareholders to vote on the proposed merger by April 2026.

Regulatory approval represents the largest uncertainty. The combined company would control an enormous share of scripted content production and streaming distribution. Antitrust authorities in the U.S., European Union, and other jurisdictions will scrutinize whether the deal substantially lessens competition.

Financial Implications

The all-cash structure requires Netflix to deploy significant financial resources. The company ended 2025 with approximately $8 billion in cash and equivalents, meaning it will need substantial debt financing to complete the transaction.

Netflix's strong cash flow generation—projected at over $10 billion annually—provides capacity to service acquisition debt. The company's credit rating remains investment-grade, ensuring access to favorable borrowing terms.

The pause in share repurchases will disappoint some investors who valued the capital returns program, but most analysts view the Warner Bros. acquisition as a better use of capital given the strategic benefits.

Industry Reaction

The deal has sent shockwaves through Hollywood, where competitors are scrambling to assess the implications. Disney, in particular, faces an altered competitive landscape if Netflix gains access to DC Comics intellectual property and HBO's programming muscle.

Some industry veterans question whether Netflix's engineering-driven culture can successfully manage traditional Hollywood operations, where personal relationships and creative autonomy have historically determined success. The company's track record integrating smaller acquisitions provides limited guidance for a deal of this magnitude.

What It Means for Consumers

For streaming subscribers, the merger could eventually bring HBO Max content directly into Netflix's interface—eliminating one more subscription decision. However, the combined company's pricing power raises concerns about future rate increases as competition diminishes.

Content creators may benefit from a strengthened buyer for premium programming, though the consolidation reduces overall demand as two content-hungry platforms become one. The long-term effects on creative diversity remain uncertain.

The deal represents the culmination of a decade of streaming wars—a period that began with Netflix disrupting traditional media and may end with Netflix absorbing one of its most formidable competitors.