Netflix is zeroing in on the crown jewels of Warner Bros Discovery, preparing an all-cash offer for its studios and streaming services while leaving its linear networks behind. The $83 billion deal is designed to acquire high-growth assets like HBO and Warner Bros Pictures, while excluding traditional cable channels such as CNN, the Cartoon Network, and the Discovery Channel.
This separation is a key component of the deal structure. Under the original agreement, WBD shareholders were to receive equity in a new company formed by these leftover networks. The move to an all-cash offer for the streaming assets simplifies the transaction, allowing Netflix to integrate the content it wants without taking on the baggage of declining cable assets.
The revised offer is also a defensive strategy against Paramount Skydance. Paramount has launched a hostile $108.4 billion takeover bid for the entire company. WBD has rejected this bid as debt-laden and risky, prompting Paramount to attempt a boardroom coup to force the deal through.
However, the deal’s focus on consolidating streaming power has raised red flags in Washington. Critics argue that allowing Netflix to absorb HBO and Warner Bros will create a market dominant player with too much influence. This political backlash is the biggest hurdle remaining for Netflix, now that the financial terms are being sweetened.
The market reaction suggests confidence in the split strategy. WBD stock rose 1.6% on the news, reflecting investor appetite for a deal that monetizes the company’s most valuable assets. For Netflix, the acquisition is purely about bolstering its library for the streaming wars, leaving the news and cable business to others.
