Netflix has triumphed in the bidding war for Warner Bros. and HBO, announcing a deal that could combine two of the three biggest streamers with one of the largest traditional movie and television studios.

If the deal goes through, it will fundamentally reshape Hollywood at a precarious time for the entertainment business.

But first it will be subjected to intense regulatory review in the US and other countries.

Netflix announced the blockbuster deal with Warner Bros. Discovery on Friday morning. It has agreed to buy the legendary TV and movie studio and assets like the HBO Max streaming service for $72 billion, plus debt.

The announcement jolted Hollywood and jumbled expectations about the next steps for Warner Bros. Discovery, which is also the parent company of CNN.

Warner Bros. Discovery (WBD) said it is moving forward with its plans to split into two publicly traded halves in 2026. Once the split takes effect, Netflix intends to acquire the Warner half. The other half, Discovery Global, will house CNN and other cable channels.

WBD now expects the split to take effect in the summer of 2026.

But this mega-media merger saga is far from over. Paramount and Comcast, the other media giants known to have submitted offers for WBD, may continue to pursue the company.

Surprise turn of events

For several weeks Paramount was thought to be the frontrunner in the auction for WBD. Paramount executives, who want to buy all of WBD – including its cable assets – exuded confidence about their merger proposal and their mutually beneficial relationship with President Trump.

But Netflix surprised many with the boldness of its bids. The streaming giant submitted two proposals earlier this week that vaulted it ahead of Paramount’s offers, according to sources familiar with the matter.

Furthermore, Netflix agreed to the same costly breakup fee that Paramount proposed, one of the sources said. This means the would-be buyer will pay WBD billions of dollars if the deal is not completed.

That’s critical because the biggest X factor is regulatory approval. The Trump administration will review any transaction between Netflix and WBD, and some analysts expect a political and legal battle to ensue.

Some American politicians have already raised concerns about the potential consolidation.

“Learning about Netflix’s ambition to buy its real competitive threat — WBD’s streaming business — should send alarm to antitrust enforcers around the world,” Sen. Mike Lee wrote on X. “This potential transaction, if it were to materialize, would raise serious competition questions — perhaps more so than any transaction I’ve seen in about a decade.”

But Netflix executives will argue that the assets are complementary in nature and that the deal will create “more opportunities for the creative community,” as the company said in a press release Friday morning.

Greg Peters, the Netflix co-CEO, said Warner Bros. “has helped define entertainment for more than a century,” and “with our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”

That’s the pitch. But many entertainment industry heavyweights have already heaped doubt on it.

Cinema United, a trade association representing movie theater owners, said the deal “poses an unprecedented threat to the global exhibition business,” given Netflix’s general aversion to theatrical releases.

Netflix, anticipating these objections, said Friday that it “expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.”

end one of the great media industry rivalries of the past decade. A recent Bank of America analyst report put it this way: “If Netflix acquires Warner Bros., the streaming wars are effectively over. Netflix would become the undisputed global powerhouse of Hollywood beyond even its currently lofty position.” (CNN)

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