What the US$72bn Netflix and Warner Bros Discovery deal means for you

Netflix has announced plans to buy part of Warner Bros. Discovery in a deal worth billions that could send shockwaves through the entertainment industry. See what it means.

Netflix has announced plans to buy part of Warner Bros. Discovery in a $US72 billion ($A108.4 billion) deal that could send shockwaves through the entertainment industry – especially for streaming services.

The acquisition will include WBD’s film and TV studios, HBO and HBO Max, potentially combining well over 400 million streaming subscribers and a massive library of content.

While Netflix and the HBO platforms will be run separately, a tie-up could bring Netflix smash-hits like Stranger Things and KPop Demon Hunters with WBD classics like Harry Potter, The Sopranos and Friends under one roof.

The deal – which has raised antitrust concerns – is expected to close after Warner Bros. spins off its Discovery Global business in the third quarter of 2026.

An aerial view of the Netflix studios in Los Angeles, California. Picture: Mario Tama/Getty Images/AFP

WHAT DOES DONALD TRUMP THINK OF THE DEAL?

The Trump administration views the proposed deal with “heavy skepticism,” a senior administration official told CNBC.

The New York Post reported that, “Paramount Skydance chief David Ellison met with Trump officials and key lawmakers in Washington DC on Wednesday to press his case against Warner Bros. Discovery’s potential selection of Netflix as its merger partner.”

Ellison’s billionaire father, Larry Ellison, is close to President Trump.

Meanwhile, The Wall Street Journal reported that Paramount, in a letter to lawyers for WBD, had warned that a sale to Netflix likely would “never close” because of regulatory challenges in the United States and overseas.

“Acquiring Warner’s streaming and studio assets ‘will entrench and extend Netflix’s global dominance in a matter not allowed by domestic or foreign competition laws,’ Paramount’s lawyers wrote,” the Journal reported.

David Ellison, chairman and chief executive officer of Paramount Skydance Corp., has reportedly met with Donald Trump over the deal. Picture: Kyle Grillot/Bloomberg

US Senator Elizabeth Warren, a Democrat, warned the deal “could force you into higher prices, fewer choices over what and how you watch, and may put American workers at risk.” Before the deal was announced, Republican Senator Mike Lee said Netflix’s acquisition of Warner Bros. Discovery’s streaming assets “should send alarms to antitrust enforcers around the world.”

HOW WILL THE DEAL IMPACT STREAMING?

While Netflix has promised to continue Warner Bros. theatrical releases at the box office, all eyes are on how the deal will impact Netflix and WBD’s HBO Max.

They are currently the number one and number four streaming services in the world, with roughly 300 million subscribers and 130 million, respectively.

HBO Max trails behind India’s JioHotStar in the second slot and Amazon Prime in third.

Netflix executives have stressed that the deal will ultimately create more choice and value for consumers — giving subscribers more bang for their buck with a larger suite of titles, though it was not immediately clear how subscription prices might change, if at all.

“[Netflix] has a number of options here,” Hanna Howard, research analyst at Gabelli Funds, said.

It could potentially “follow Disney’s model, which runs both Disney+ and Hulu combined, but the two streaming apps are also available separately, with Disney offering the subscription as a bundle”.

Ms Howard said she expected there would be increased flexibility and bundle offerings if the deal goes through as Netflix sought to escape regulatory scrutiny.

Netflix will also assume WBD’s other brands and properties, like DC Comics, “Harry Potter,” “Game of Thrones” and a slew of video games, “which will give Netflix a way to compete against other large players, i.e., Disney’s franchise,” Ms Howard said.

Along with major film studios and its namesake theme parks, Disney also owns several streaming services, including Hulu, Disney+ and ESPN+.

An aerial view of the Warner Bros. logo displayed on the water tower at Warner Bros. Studio in Burbank, California. Picture: Mario Tama/Getty Images/AFP

WHAT IS THE STOCK DOING?

Shares in Warner Bros. Discovery jumped 3.5% on Friday, while Netflix’s stock dipped 0.9% as the deal is expected to face intense regulatory scrutiny from officials in the US and overseas.

Paramount – which also placed bids to take over WBD along with Netflix and Comcast – bashed a potential Netflix merger in a letter to Warner Bros. earlier this week.

Even with a Netflix deal in the works, the billionaire Ellison family at Paramount is planning to plead directly with WBD shareholders, arguing the Netflix deal will be halted by regulators, The Post previously found.

WHY ARE THERE ‘GRAVE CONCERNS’?

Senior White House officials have already met to discuss antitrust concerns about a potential WBD-Netflix merger, The Post reported.

On Thursday, a group of anonymous filmmakers sent a letter to Congress with “grave concerns” about a Netflix deal, arguing the streaming giant would “effectively hold a noose around the theatrical marketplace,” according to Variety.

In a Thursday post on X, former WarnerMedia CEO Jason Kilar wrote: “If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix”.

Variety captured the industry’s alarm with a front-page headline asking: “Is Netflix Trying to Buy Warner Bros. or Kill It?”

Netflix has been planning to argue there is no evidence that the deal would reduce competition or harm consumers, since they could offer a Netflix-and-HBO Max bundle that would ultimately cost less, a source familiar with the matter told The Wall Street Journal.

The leading cast of The Big Bang Theory.

WHAT ELSE DOES WARNER BROS. OWN?

Along with its namesake film and TV studios, WBD also owns HBO Max and DC Studios, and tons of popular franchises like “The Big Bang Theory,” “The Sopranos,” “Game of Thrones,” “Harry Potter,” “Friends” and “The Wizard of Oz”.

Its Discovery Global business – which is being spun off and will not be included in the deal – includes global cable networks and digital businesses like CNN, Discovery and Discovery+, TNT Sports and Bleacher Report.

This story first appeared in the New York Post

Originally published as What the US$72bn Netflix and Warner Bros Discovery deal means for you