Following months of debate, speculation, twists, and turns, the Warner Bros. Discovery auction process finally has a winner. Following a first round of non-binding bids for its assets on November 20, WBD set a new deadline for a second round of offers, set to take place on December 1. It was then that Netflix submitted an attractive, almost all-cash bid. Now, following that, it's become official: Netflix won the bidding war for Warner Bros. Discovery.
Bloomberg first reported the news, which was later corroborated by The Hollywood Reporter and Variety. The streamer has now entered exclusive negotiations with Warner Bros. Discovery to acquire its film and TV studio, as well as its streaming service, HBO Max. Per Bloomberg, the companies could close a deal in the coming days. The outlet also revealed Warner Bros. Discovery will complete its planned split from its cable networks (such as TNT, TBS and CNN) before closing the sale with Netflix.
The new entity carrying those brands will be known as Discovery Global. The spinoff is expected to be completed by mid-2026. The sale process is not yet complete, however. Talks between the two could still technically fall apart. Then, even if a deal does close, the companies still have to pass through regulatory processes. Should regulators reject the deal, Netflix has offered a $5 billion breakup fee for the failed transaction.
It's hard to overstate how much of a shift this merger—should it close—could introduce to the entertainment industry. Prior to the monumental announcement, CNBC Business News David Faber revealed Netflix had emerged as the strongest contender in the race after submitting the highest bid: "[What] we can share at this point according to people familiar with the situation is, Netflix is in the lead in the bidding for Warner Bros. Discovery."
Per CNN Business, Netflix's offer was of approximately $28 per share. Paramount, meanwhile—who was seeking control of the entire company (studio and cable networks alike)—is said to have offered an estimated $27 per share, up from its previously proposed $23.50 from October. The increase came on the heels of the company reportedly seeking out the backing of three Middle Eastern entities for its latest bid.
Leading up to Netflix winning the bidding war, Paramount appeared to consider the streamer a threat in its pursuit to acquire WBD. It was recently revealed that the company, through its attorneys, had sent a letter to Warner Bros. Discovery CEO David Zaslav, expressing concerns over the fairness of the ongoing bidding process. In the document, Paramount specifically identified Netflix as being the most favored potential buyer in the process.
Assuming Netflix and WBD reach a deal in the coming days, there are still regulatory hurdles to be cleared. The streamer is now facing heavy pushback from Hollywood. Variety reported that a "consortium" of individuals in the industry have submitted a letter "full of alarm" to Congress regarding the potential pitfalls of a merged Netflix-Warner Bros. Discovery.
The letter was said to have been emailed anonymously to members of Congress, with the authors identifiying themselves as "concerned feature film producers." According to the trade, the consortium included multiple high-profile creatives. The email detailed fears over a potential Netflix-Warner Bros. merger, stating such an acquisition could significantly damage theatrical distribution.
Per Variety, some sources stated that Netflix's proposal to Warner Bros. Discovery involved reducing the theatrical exclusivity window to as little as two weeks. However, another source disputed that, stating the theatrical windows Netflix would establish would be "longer." The message included a request for Congress to give a potential merger between the two "the highest level of antitrust scrutiny."
Now, it remains to be seen how the negotiations between Netflix and Warner Bros. Discovery go, and the ramifications their deal will have on the entertainment industry.