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Warner Bros-Discovery's $72 Billion Offer to Netflix Sparks New Debate on Streaming Power Plays

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  Published in Media and Entertainment on Friday, December 5th 2025 at 22:40 GMT by Reuters

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Warner Bros‑Discovery’s $72 Billion Offer to Netflix Sparks New Debate on Streaming Power Plays

In a headline‑grabbing move that rattled the entertainment industry, Warner Bros Discovery (WBD) announced a $72 billion takeover offer to Netflix in early 2025. While the deal ultimately stalled, its mere existence has shifted the spotlight onto the performance‑driven titans of the streaming arena and re‑ignited questions about how much power a single platform can wield in an already crowded market.

The Deal on Paper

WBD, which had just been purchased by Amazon for $72 billion the year before, saw an opportunity to double‑dip by selling the company’s core streaming assets—Burbank’s flagship library of movies, series, and documentaries—to the rival streaming juggernaut. The offer comprised a combination of cash, debt assumption, and a share‑swap component that would grant Netflix a 60‑percent stake in WBD’s post‑merger entity. The proposed structure would effectively make Netflix the controlling partner in what would become a global entertainment behemoth with a catalog that includes “Friends,” “The Big Bang Theory,” “The Matrix” franchise, and a vast trove of blockbuster films.

Under the proposed terms, Netflix would also acquire exclusive distribution rights to several of WBD’s original series and film projects slated for release in the next 24 months. In return, WBD’s board would be able to raise additional capital from the cash portion and reduce its debt load. For Netflix, the deal promised immediate expansion of its library and a direct pipeline of proven hits that would help it fight for subscribers in markets where the streaming wars are at their fiercest.

Why the Deal Attracted Attention

1. Scale and Scope
   At the time, Netflix had already been aggressively expanding into international markets. A $72 billion acquisition would have doubled its content library and positioned it as the industry’s biggest content owner. The sheer scale raised eyebrows about antitrust implications and the potential for “content gatekeeping” that could stifle competition.

2. Strategic Alignment (or Lack Thereof)
   While WBD’s catalog was undeniably rich, the company had long been a partner to other platforms, licensing its content to Disney+, Amazon Prime Video, HBO Max, and even free‑to‑air broadcasters. The proposal, therefore, threatened to upset a delicate balance of power among streaming and broadcast ecosystems.

3. Financial Ramifications
   The $72 billion figure was, by any measure, astronomical for a company with a net income of only a few hundred million a year. Netflix’s board would need to marshal a huge portion of its cash reserves or issue new debt, potentially diluting existing shareholders.

Stakeholder Reactions

• WBD Management
  The company’s CEO, David Zaslav, publicly said the offer was “a positive and constructive conversation.” Yet, insiders noted that WBD’s board was skeptical of the valuation and feared that an acquisition by Netflix could diminish its independence and reduce its attractiveness to other streaming partners.

• Netflix Leadership
  CEO Reed Hastings emphasized that the company was “open to any strategic options that could help us grow and continue to deliver value.” However, he stressed that the deal was still far from finalized and that any partnership would need to align with Netflix’s long‑term content strategy.

• Industry Analysts
  Some analysts argued that the proposal signaled a shift toward consolidation. Others warned that the deal could provoke a backlash from regulators, especially after the European Commission’s recent scrutiny of big tech acquisitions.

Why the Deal Stalled

1. Regulatory Concerns
   Antitrust regulators in the U.S., EU, and other regions flagged the deal as potentially violating competition laws. The possibility of a European Commission inquiry, similar to the scrutiny faced by Amazon’s 2020 acquisition of Whole Foods, posed a significant risk.

2. Valuation Disagreements
   Netflix’s board was uneasy about the price-to-earnings ratio implied by a $72 billion valuation, especially given WBD’s modest earnings. In addition, the debt component of the deal raised concerns about financial leverage.

3. Strategic Mismatch
   WBD’s existing licensing relationships with other streaming services made a full takeover by Netflix appear as a “zero‑sum game.” Several of WBD’s partners, including Disney+ and HBO Max, reportedly expressed concerns that a Netflix acquisition could jeopardize their own content deals.

4. Investor Pressure
   Shareholders of both companies pressed for a clearer path forward. Some WBD investors demanded a more traditional sale that would not entail a complex share‑swap, while Netflix shareholders feared dilution.

Industry Ripple Effects

• Amazon’s Takeover of WBD
  The previous year’s $72 billion purchase by Amazon highlighted the appetite for “content first” strategies. Amazon’s acquisition added to the pressure on Netflix to consider a similar scale of acquisition.

• Disney’s Strategic Play
  In a related Reuters piece, Disney’s CEO Bob Iger announced a new push for original content on Disney+, citing the need to “compete with the likes of Netflix, HBO Max, and Amazon Prime.” The potential of a WBD‑Netflix deal, even in failure, sharpened Disney’s focus on content creation as a competitive moat.

• Regulatory Landscape
  The stalled deal has prompted policymakers to rethink how streaming consolidation is regulated. Several legislative proposals are now on the table that would require streaming giants to divest certain content rights if they were to acquire competitors.

Looking Forward

While the $72 billion Netflix‑WBD deal has been shelved, the conversation it sparked will shape the industry for years. Netflix may still look to bolster its library, but it appears more likely to pursue strategic content partnerships, rather than outright mergers. Meanwhile, WBD is poised to navigate its newfound independence while courting multiple partners across the streaming spectrum.

For now, the entertainment world watches closely to see whether the next wave of consolidation will be a “buy‑out” or a “content‑sharing” model, each carrying its own set of risks and rewards. The $72 billion headline may have faded, but its implications remain front and center in the battle for streaming supremacy.