Netflix is poised to make the biggest move in its corporate history after emerging with the leading bid for Warner Bros. Discovery, setting the stage for exclusive negotiations that could reshape the entertainment industry.
Sources familiar with the situation told Deadline that the streaming giant put forward an offer valuing WBD at roughly $28 per share, mainly in cash, topping competing bids from Paramount and Comcast.
The fast-paced auction follows Warner Bros. Discovery’s October decision to formally explore a sale after receiving multiple overtures from Paramount. Executives had been targeting a deal by mid-to-late December, and momentum accelerated quickly as regulators, bankers, and rival media companies weighed in.
Under the structure now on the table, Netflix would acquire Warner Bros.’ core studio operations and the HBO Max streaming business. Paramount’s rival proposal sought to purchase all of WBD, while Comcast focused on the studio and streaming units.
Additionally, Netflix included a $5 billion breakup fee should the deal fail to close.
Paramount has raised concerns about regulatory risks, arguing that Netflix’s dominance in global streaming could prompt serious antitrust scrutiny if HBO Max were folded into its platform.
In correspondence to WBD’s board, Paramount claimed its own offer carried a more straightforward path to closing. Warner Bros. Discovery responded by saying its board had fulfilled its fiduciary duties “with the utmost care.”
The bidding process has also heightened internal tensions. Paramount alleged the sale discussions were influenced by management incentives, pointing to revised compensation terms for WBD CEO David Zaslav that account for a potential sale rather than a previously planned corporate split. Any future role for Zaslav in a Netflix-led Warner entity remains unclear.
Investor reaction was swift. Warner Bros. Discovery shares climbed nearly 6% in late trading to about $26, a 52-week high and a dramatic rebound from the stock’s $7.50 low earlier this year.
Media analysts say Netflix’s interest reflects a strategic shift. “They were willing to pay for the elimination of a competitor, the acquisition of franchise control, and the synergy potential,” Bank of America analyst Jessica Reif Erlich wrote, calling Warner Bros. Studios a “crown jewel” thanks to IP spanning Harry Potter, DC Comics, and Game of Thrones.