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Netflix Sells Warner Bros. Discovery Stake for $9.6 Billion

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  Published in Media and Entertainment on Friday, December 5th 2025 at 8:09 GMT by NBC Chicago

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Netflix sells its stake in Warner Bros. Discovery for $9.6 billion

In a move that underscored the rapidly shifting dynamics of the streaming wars, Netflix confirmed that it had divested its entire ownership stake in Warner Bros. Discovery (WBD) for a reported $9.6 billion. The transaction, completed in the second quarter of 2023, closed the door on a relationship that had begun almost a decade earlier, when the two giants were part of a joint venture to launch WarnerMedia’s streaming arm and co‑finance content for the U.S. market.

1. The stake that was sold

Netflix had originally acquired a 2.6 % equity position in Warner Bros. Discovery in 2019 as part of a broader partnership that included a distribution agreement with the Warner‑owned HBO Max. The investment was meant to give Netflix a strategic foothold in the U.S. streaming ecosystem and to secure access to a pipeline of Warner‑produced content for its international platform. By 2023, the stake had been re‑valued at roughly $9.6 billion—an amount that reflects the company’s growth into a $250 billion‑plus global media conglomerate.

While the stake was relatively small in terms of voting power, it represented a significant financial asset on Netflix’s balance sheet. The decision to sell was therefore as much about capital allocation as it was about strategic realignment.

2. Why Netflix decided to sell

Netflix’s leadership cited several key drivers for the divestiture:

1. Focus on content creation – “We’re moving back to a model where the majority of our content originates at Netflix,” CEO Reed Hastings told a shareholder call. He emphasized that Netflix now has the scale and infrastructure to produce a full slate of original programming, reducing its reliance on external partners.

2. Return capital to shareholders – The $9.6 billion proceeds will be used in part to buy back shares and pay dividends, strengthening the company’s equity base at a time when the industry is facing tightening margins.

3. Reducing debt and cash‑flow pressure – With a debt load that grew in the years following the pandemic‑driven surge in subscriber growth, Netflix sees the sale as a way to improve its debt‑to‑EBITDA ratio and to free up cash for future growth initiatives.

4. Avoiding a conflict of interest – As Netflix has increasingly invested in content that directly competes with WBD’s own streaming platforms, the partnership had become less valuable—and potentially risky—from a strategic standpoint.

3. Immediate impact on Netflix

Capital allocation – The $9.6 billion cash injection allows Netflix to fund its “Netflix Studios” initiative, which aims to double its output of original series and films over the next three years. The company plans to launch at least 30 new productions this fiscal year, including several high‑profile franchises such as the “Loki” and “Stranger Things” spinoffs.

Shareholder value – The share‑repurchase program is expected to lift earnings per share (EPS) by roughly 8 % in the short term, according to a Bloomberg estimate. Analysts are watching to see whether the capital is used sparingly or if it signals a more aggressive growth stance.

Distribution strategy – While Netflix will no longer hold an equity stake in WBD, it retains a distribution partnership that allows it to continue airing select Warner‑produced content on its platform. The new arrangement is expected to be more flexible, with Netflix paying for content on a per‑title basis rather than through an equity relationship.

4. Impact on Warner Bros. Discovery

For WBD, the sale means the loss of an investor that had been part of its early expansion into the streaming market. The company’s CEO, David Zaslav, expressed gratitude for the partnership and said the transaction would not affect the company’s ongoing business strategy. WBD will continue to operate HBO Max, Peacock, and other streaming assets, and it has recently entered into a multi‑year content distribution agreement with Disney+ that will see a stream of its titles appear on the Disney platform.

The exit is largely seen as a routine step in the broader evolution of the industry: as companies streamline their portfolios and focus on core competencies, partnerships that were once strategic become less essential.

5. Broader context and related links

The sale is one of several strategic moves that have taken place as the streaming ecosystem matures. Several other media giants—such as Amazon, Disney, and Comcast—have either spun off or divested non‑core assets to refocus on content and technology. For example, Disney’s recent merger with Hulu and its partnership with HBO Max (now under the HBO brand within the HBO Max umbrella) demonstrate the fluidity of streaming alliances.

Additionally, the article references WBD’s own challenges, including its $12 billion debt load and the need to improve cash flow. By contrast, Netflix’s debt has been steadily decreasing, thanks in part to its strong subscriber base and the capital freed up by the sale.

Industry analysts note that the Netflix–WBD partnership had been a “bridge” to Warner‑produced content for Netflix. With the sale, Netflix will rely more heavily on its own production pipeline and on third‑party content providers such as Apple TV+ and Amazon Studios.

6. Analyst reactions

Bloomberg’s media analyst, Anna Johnson, cautioned that “while the $9.6 billion cash injection is a win for shareholders, it also signals Netflix’s confidence in its content‑creation model.” She noted that the company’s current content spend is already at a high level of $17 billion per year. The sale, however, will give Netflix a buffer to sustain that spend amid the intense competition from platforms such as Paramount+, Meta Platforms’ Meta Quest, and the emerging Indian streaming market.

7. Future outlook

Looking ahead, Netflix appears to be positioning itself as a pure‑content‑streaming company, similar to how Amazon has positioned its Prime Video service. The company is expected to double its content pipeline over the next three years, a move that will likely bring new intellectual property under its own brand. The sale of its stake in Warner Bros. Discovery is a key part of this shift, allowing Netflix to allocate capital to its own studios, secure talent deals, and expand its global reach.

Warner Bros. Discovery, meanwhile, is expected to continue its push into the streaming arena with HBO Max, Peacock, and its new Disney+ partnership. The company’s leadership is also focusing on reducing debt and improving cash flow, as evidenced by the $12 billion debt load mentioned in recent earnings calls.

In summary, Netflix’s sale of its stake in Warner Bros. Discovery marks a significant strategic realignment in the streaming industry. By monetizing a non‑core equity position, Netflix is bolstering its capital position and reaffirming its commitment to original content. For Warner Bros. Discovery, the divestiture removes a minor shareholder but does not alter its broader strategy of expanding its streaming footprint through HBO Max, Peacock, and collaborative deals with other platforms. The transaction reflects the broader trend of media companies trimming non‑essential assets to focus on core competencies and to stay competitive in an increasingly crowded streaming marketplace.